M&A

A-T Solutions buys risk management firm

Acquisition of GreenLine adds big data, predictive analytics capabilities

In a deal that moves the company “left of the boom,” A-T Solutions has acquired GreenLine Systems, a company that develops risk management solutions for maritime and cross-border movement of ships, cargo and people.

To this point, most of A-T’s anti-terrorism solutions have focused primarily on reactive products, such as mitigating improvised explosive devices, but with GreenLine, A-T picks up more big data and predictive analytics capabilities, said Dennis Kelly, A-T’s CEO.

“We’ve had a strategy for a few years to get more predictive to prevent terrorist attacks before they happen, and GreenLine give us that,” he said.

Financial terms of the deal were not disclosed.

Another plus is GreenLine’s international presence. The company has offices in the United States, Canada and the Netherlands. It also recently won a contract in Malaysia, and is working on deals with countries in the Caribbean and Latin America.

“They have a lot of opportunities with smaller countries that are in need of predictive customs solutions,” Kelly said.

GreenLine’s products monitor a variety of transportation datasets looking for anomalous behaviors.

“It’s about risk management,” Kelly said. “Where are the high risk vessels entering your waters? It’s the classic needle in the haystack problem.”

GreenLine also is expanding into passenger risk management, where predictive analytics are used to monitor people crossing a country’s borders, he said.

The two companies began negotiating the deal in June and signed an exclusive agreement in July. The deal took a while to close in part because A-T is cautious and in part because of GreenLine’s small size, Kelly said.

Due diligence took longer because, as a small company, GreenLine didn’t have the accounting and business systems in place to easily pull together the data needed for the process, he said.

“Some things had to be recreated, so it took longer, but they were very cooperative,” Kelly said.

GreenLine will finish 2013 with between $14 million and $15 million in revenue. It has about 60 employees.

The company had reached a point where the owners needed to decide whether to invest in the infrastructure, business development and accounting systems to continue to grow, or find a buyer, Kelly said.

GreenLine’s management team will stay on board and continue running the business, which is another requirement A-T looks for in an acquisition. “We aren’t interested in buying companies and then taking management out,” he said.

Mergers and acquisitions have slowed to snail’s pace in 2013 because of budget uncertainty, but this deal avoided that dilemma, Kelly said.

First, border protection is an area where countries will continue to invest. But transportation and customs work also is often fee-based, which provides a more predictable revenue stream.

“A lot of this is outside the normal budget cycle,” Kelly said.

Another attractive quality of the deal is that the two companies share a very mission-focused culture. Both A-T and GreenLine have a mix of products and services, and it was important to GreenLine to join a company with a similar mix.

“Cultural fit is very important to us because if you acquire a company with a culture that is 180 degrees from yours, then it will be a very difficult integration,” Kelly said.

The company had other interested buyers, “but they wanted to find a good home,” he said. “Price isn’t always a deciding factor. It was more about finding the right fit to take them to the next level.”

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