Forming a JV to successfully enter a new market 

While programmatic collaboration among competitors is common across the defense industry in the United States, few joint ventures exist

A large and dynamic defense budget coupled with an active public and private market led to the growth of large Prime contractors and diversity across businesses in the mid-tiers. In contrast, joint ventures are common in the European Union and the Middle East, given more market fragmentation and a need to protect national champions. 

Today, as the defense market has undergone a magnitude step-change in demand and multiple constraints exist across the supply chain, the volume of strategic partnerships and joint ventures has increased. Commercial relationships have increased between established suppliers and new entrants and among defense technology firms.  

Critically, international firms with relevant and world-leading technology see this as an opportunity for entry and often require a partner in the United States to help accelerate their path to market

Across the missile, munitions, and energetics market, the United States is expected to spend more than $40 billion annually on a go-forward basis more than doubling funding levels of the past few decades adjusted for inflation. However, the supply chain cannot meet this demand which provided ‘InternationalCo’ an opportunity to enter the market and help prime contractors in the United States solve a critical bottleneck by bringing differentiated capability that can immediately alleviate supply chain constraints. 

Strategic partnership analysis and selection

Renaissance developed a comprehensive market forecast and competitive analysis that provided the management team confidence that the opportunity exists and it is enduring. Analysis revealed that a greenfield approach alone was not strategically viable. Instead, an approach to identify and prioritize a willing counterparty was identified. Dozens of partners were evaluated via Renaissance's Access, Agility, and Acceleration (A3) partnership selection framework.  

Multiple variables were considered that range from program positioning, customer exposure, and Congressional influence to capability alignment, financial strengths, and facilities among others. 

Given the technology and its need in the market, more than a dozen relevant partners were identified and a roadshow to meet each one was initiated. A full business case for the opportunity was developed and a proposed joint venture structure was presented. Interest emerged from more than a handful of partners with the Client selecting two with which to begin an opportunity diligence process. Preparedness to co-invest and move quickly helped down-select to one preferred partner.  

Confidence to move forward

A 10-year bottom-up business case with investment, top-line market adoption, and three-statement financial outputs were prepared to inform both parties of the investment and help assign a value to the JV. Renaissance worked alongside both executive teams and helped with negotiations leading to successful formation of the JV and ground broken on a world-class facility.