Defense & Security Financing Sinks in Q109

A report by Venture Business Research (VBR) in the UK shows that venture capital and private equity deals sunk dramatically in the first quarter of 2009. Security Systems News summarizes the findings:

According to VBR, private companies in the security (IT and homeland) and defense sector saw investment of just over USD 2bn in 1Q 2009, a 20 percent decline from 4Q 2008 and a 79 percent decline from 1Q 2008.

and

Private equity buyout investment in 1Q 2009 in the security and defense sector stood at USD 1.1bn, according to VBR, a decline of 34 percent from 4Q 2008 and nearly 90 percent from 1Q 2008. Excluding private equity buyouts, investment in the security and defense sector amounted to just over USD 0.9bn in 1Q 2009, an increase of 6 percent over 4Q 2008 and a three percent increase from 1Q 2008.

VBR CEO says despite the steep decline the sector is stronger than others and that investment opportunities exist.

Merger and acquisition activity is still “very active” in the sector, said Lloyd. “Bullish would be the wrong way to describe how we see the sector, but when we look at all the sectors out there and we talk about where the money is going, where it’s likely to go, there’s no doubt there are still significant opportunities for investments.”

The general consensus seems like the market has reached its bottom and that conditions should improve, if not substantially, for the rest of the year. 

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