Three small firms merge to create new company

Three affiliated companies merged today to form a new entity specializing in information technology services and solutions for the federal marketplace.

Arlington, Va.-based Centurum Inc. brings together Techplan Corp., TDS Inc. and Klein & Stump Inc.

Techplan provided systems integration and management solutions to clients in the federal and commercial sectors. TDS supplied IT support to the Defense Department, primarily installing and maintaining IT systems on Navy warships. Klein & Stump specialized in information operations and knowledge management and cryptology services for classified U.S. government customers.

As Centurum, the combined units will offer a range of IT and related communications and command and control functions, including network engineering services, systems integration, business process management, systems engineering and design, information operations and analysis and operational support.

"Our feeling was at this time in the market we wanted to bring together the organizations under a central banner in order to provide a greater degree of services offerings to our clients ? but also to raise the profile of the company," said Robert Matteucci, Centrum's chairman and chief executive. He served as chief executive of TDS and Techplan.

Jerry Stump, a Klein and Stump cofounder, is Centurum's president.

Matteucci founded Techplan in 1969 and was its chief executive. He set up TDS in 1974. Techplan acquired Klein & Stump in 1993.

In 2003, the three companies had combined revenue of about $52 million with 9 percent to 10 percent profit, Matteucci said. He expects the combined entity to post 2004 revenue in the low $60 million range. Centurum wants to double its revenue within two years.

Matteucci wants Centurum to grow internally and by acquiring niche IT firms with annual revenue of $10 million-$20 million. The privately owned company may mull going public in the long-term future, he said.

Matteucci said Centurum would go after multiyear contracts in the $100 million range, but declined to name specific procurements it intends to pursue. The three companies together are prime contractors on about 60 percent of their work now, but Matteucci wants to increase the number to about 80 percent.

Although still small IT company in the federal marketplace, Centurum wants to distance itself from smaller players that have annual revenue of $30 million or less, said Samuel Seymour, a company senior vice president. The company plans to go head-to-head with large companies such as Lockheed Martin Corp. and Northrop Grumman Corp., as well as mid-size companies, such as CACI International and Anteon International Corp. Some of Centurum's partners are BearingPoint Inc., Computer Sciences Corp., EDS Corp., General Dynamics, Lockheed Martin, Raytheon Co., Science Applications International Corp. and Titan Corp.

But as a smaller company, Centurum will be able to offer its customers the flexibility and responsiveness that larger firms cannot, Matteucci said.

With nearly 500 employees, Centurum has other offices in Marlton, N.J., Charleston, S.C., Norfolk, Va., San Diego and Tampa, Fla. About 80 percent of the company's employees have Defense Department security clearances.

Centurum's current federal customers include the U.S. House of Representatives, U.S. Navy and Justice and State departments. It plans to pursue new business from the Commerce, Energy and Homeland Security Departments and the FBI.

"We see a strong capability to bring current Defense Department-cleared individuals and capability into the law enforcement and first responder [markets] as it pertains to IT," Seymour said. "There's a big need for that right now. The human capital in the government is really stretched to the limit."