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Thank you.
 A new sector of the government
services market—one that should be of increasing interest to IT
companies—is starting to experience the rapid increase in merger
and acquisition activity that is so familiar to systems
integrators.
Government technical services companies are being
bought and sold at an accelerated rate, as established companies and
private equity groups make more deals.
With the increase has come
a heightened awareness of the trend. At the Oct. 11 conference of
government service providers’ group Contract Services Association
(CSA), industry expert John Allen moderated a panel on mergers and
acquisitions.
“A year or so back I said that this market was
getting ready for a period of consolidation,” said Allen,
co-managing director of investment bank BB&T Capital Markets/Windsor
Group of Reston, Va. “I can’t say it’s preparing any
more. Consolidation is in full swing.”
Many CSA companies
provide technical services, which is a broad umbrella covering base and
facilities management services. These services range from ground
maintenance to operating water, heating and ventilation, and power
systems, as well as procurement, logistics and fleet and aircraft
maintenance. Estimates on what the government spends annually on these
services range as high as $100 billion.
That number is likely to
grow, especially as the government looks to increase its outsourcing.
The growth has attracted equity groups such as Veritas Capital, which
last year acquired most of DynCorp’s technical services business
from Computer Sciences Corp. Another investor group, Cerberus Capital
Management, which owns IAP Worldwide Services Inc., in March used IAP
March to acquire part of Johnson Control Inc., creating a $1
billion-a-year company.
The upshot for systems integrators and
other IT contractors is that companies in this space may be new
competitors or partners as they, and the technical services market, grow
and take on more IT elements.
SRA TO ACQUIRE SPECTRUM SOLUTIONS
GROUP
SRA International
Inc. signed a definitive agreement to acquire Spectrum Solutions Group
Inc.
ICF CONSULTING ACQUIRES HUMAN SERVICES CONSULTING
FIRM
ICF Consulting Group
Inc. has acquired local consulting services firm Caliber Associates, a
provider of IT consulting services to the federal
government.
MCNEIL TECH CLOSES TWO
DEALS
McNeil Technologies
Inc. closed a pair of deals last week, one for a government contractor
and a second for the government contracts held by another
company.
SAIC FINISHES IMAPS
ACQUISITION
Science
Applications International Corp. completed its acquisition of assets of
geospatial technology firm IMAPS
LLC.
CACI TO ACQUIRE PROFESSIONAL, ANALYTIC SERVICES
COMPANY
CACI International
Inc. will acquire National Security Research Inc., a provider of
professional and analytic
services.
LOCKHEED MARTIN CLOSES COHERENT
PURCHASE
Lockheed Martin
Corp. completed its acquisition of remote sensing systems maker Coherent
Technologies Inc.
yesterday.
FILENET TO ACQUIRE CONTENT COMPLIANCE PROVIDER
FileNet Corp. signed an
agreement to acquire Yaletown Technology Group Inc., a provider of
content compliance software, in an all-cash transaction valued at about
$11
million.
DRS TO ACQUIRE MILITARY ELECTRONICS PROVIDER
DRS Technologies Inc. has
signed a definitive agreement to acquire Engineered Support Systems Inc.
for nearly $2 billion in a cash and stock deal, the company said
today.
COMPUDYNE ACQUIRES INVESTIGATIVE TOOLS
FIRM
CompuDyne-Public
Safety and Justice Inc., a subsidiary of CompuDyne Corp., has acquired
Xanalys Corp., a provider of crime-solving and data-sharing
tools.
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