DigitalNet to acquire UTA

DigitalNet Inc. is planning to acquire User Technology Associates Inc. in a $50 million deal that expands DigitalNet's presence in homeland security and law enforcement agencies.

The acquisition is expected to close before the end of the first quarter. The deal for UTA is the first acquisition DigitalNet has made since it went public in October.

One reason for the initial public offering was to raise capital to make acquisitions, company officials said at the time. DigitalNet is using cash on hand and is borrowing about $35 million to make the deal, company officials said.

UTA of Arlington, Va., provides information technology services such as managed network services, systems development, systems engineering and integration, advanced computing and mission critical outsourcing. Customers include the Defense Department, FBI, Homeland Security Department and Justice Department.

The work UTA does with Jet Propulsion Laboratory will be moved another company owned by UTA's current owner and will not be acquired by DigitalNet, company officials said.

"UTA is very strategic to DigitalNet's focus on expanding its homeland security and law enforcement presence while further deepening our high-end IT solutions capabilities," said Ken Bajaj, chairman and chief executive officer of DigitalNet. "UTA provides high level entry into DHS and expands our presence at the FBI and the Department of Justice."

DigitalNet also will leverage its secure, interoperable information security services and solutions within UTA's core customer base in homeland security and law enforcement, Bajaj said.

Herndon, Va.-based DigitalNet is picking up about $59.6 million in annual revenue and earnings of about $6 million. UTA also is bringing about 575 employees. DigitalNet is projecting its 2003 revenue to be about $288 million.