Page 72 - FCW, March/April 2018

M&A Report
The top mergers and acquisitions of 2017
More than 100 deals closed last year — here are some that are expected to have the biggest impact on the federal IT market
BY NICK WAKEMAN
In 2017, more than 100 mergers and acquisitions closed in the government market, and for the companies involved, they were transformative events. For buyers, the deals represent opportunities to add new contracts, new capabilities and scale. It helps them crack new markets and gain critical skill sets.
For sellers, the reasons vary widely. For company founders, it can mean retirement has come. For spin-offs
from large businesses, it is often about shaping portfolios and jettisoning a business that no longer ts with a rm’s core strategies. And in other cases, being acquired is an opportunity to join forces with a large organization that can bring more resources and support.
Washington Technology tracked and evaluated those deals and has identi ed the best among them. The mergers and acquisitions below stand out because of what they say about trends in the market and how companies are positioning themselves to pursue new opportunities.
Single best deal
Buyer: Booz Allen Hamilton Acquisition: Aquilent Value: $250 million
Why: The deal bolsters Booz Allen’s capabilities in digital, agile, DevOps and cloud capabilities. Aquilent was growing rapidly with customers at the Depart- ment of Health and Human Services, U.S. Postal Service, General Services Administration and other federal agencies.
Booz Allen doesn’t make large acquisi- tions often, and this was a large one. It ts well with the rm’s 2020 strategy to infuse its consulting capabilities with technology services and to target growth areas such as digital and cloud computing.
Top dealmaker (made two or more deals)
Buyer: CSRA
Acquisitions: NES Associates and
Praxis Engineering
Value: $105 million for NES and $235 million for Praxis
Why: These were the rst deals CSRA made after being created by the spin-off from Computer Sciences Corp. and the merger with SRA International.
NES added skills in IT infrastructure, network operations, data center and
applications-related services, particularly with defense customers. Praxis solidi- ed CSRA’s footprint with the National Security Agency and other intelligence community customers for which it pro- vides software and systems engineering. Its work focuses on mission application development and engagement, meaning it has deep relationships at the agencies and intimately supports their mission.
Honorable mention: Accenture’s acqui- sitions of Phase One Consulting Group, VeriSign’s iDefense Security Intelligence Services and Endgame’s federal govern- ment business.
Best merger of equals
Buyer: TeraThink
Acquisition: Dominion Consulting
Value: Not disclosed, but the combined entity has $80 million in annual revenue
Why: True mergers of equals are rare in the government market, but these two rms came together and melded man- agement teams and operations. Their combined skills include customer trans- formation, automation, agile develop- ment, enterprise applications and cloud computing. They have both defense and civilian customers.
The merger creates a larger platform for making more acquisitions and pursu- ing larger contracts.
68
March/April 2018 FCW.COM