Indus starts its M&A engine

Indus Corp. jumped into the mergers and acquisitions game in a big way this week, closing back-to-back deals on Wednesday and Thursday.

The Vienna, Va.-based IT provider acquired privately held Aaron B. Floyd Enterprises Inc. of Alexandria, Va., for an undisclosed amount on Wednesday; and then on Thursday, Indus closed on a deal to acquire the federal government business of Halifax Corp., also of Alexandria.

The Halifax deal was worth $12.5 million, according to Halifax's filings with the Securities and Exchange Commission.

Privately held Indus made two small acquisitions in 1996 and 2000, but these are the first major acquisitions the company has completed, said Shriv Krishnan, the company's president and chief executive officer.

With the A.B. Floyd deal, Indus is picking up $14 million in annual revenue. The Halifax acquisition brings in $13.6 million in revenue. Both companies primarily do business with defense and intelligence agencies.

Krishnan said that Indus should have a run-rate of about $110 million in annual revenue with the acquisitions.

The deals bring in needed business with defense and intelligence agencies, he said. Indus's major customers have been with civilian agencies, such as the Environmental Protection Agency, the Justice and Homeland Security departments and NASA.

"Two years ago, we decided to move methodically into the [defense] market," he said.

The company came close to closing other deals, but for a variety of reasons "we had to walk away," he said.

More deals could be in the works for the next 12 months, but Krishnan said his top priority is to integrate A.B. Floyd and Halifax, which adds 200 people to Indus' staff of 450.

"You really need to have the right interval between acquisitions," he said. "If you don't, and make acquisitions just to make acquisitions, you may fall on your face."