Kratos expands DOD reach with acquisition

Kratos Defense and Security Solutions Inc. plans to acquire Haverstick Consulting Inc. for about $90 million in cash and stock.

Kratos, based in San Diego, specializes in national defense and security, and believes the acquisition will broaden its reach in the Defense Department market. Haverstick provides engineering, logistics, suborbital rockets and rocket launch support services and other professional services to the federal government.

"This merger propels our growth in the federal market," said Eric DeMarco, president and chief executive officer of Kratos. Indianapolis-based Haverstick brings significant past performance qualifications and could give the company access to larger contract opportunities, DeMarco said.

It also increases Kratos' presence with the Air Force, one of Haverstick's key long-term customers, he said.

Haverstick sees the transaction as beneficial too, said president and CEO Howard Bates. About 75 percent of Haverstick's business is with federal agencies ? primarily DOD ? with state and local governments and commercial businesses also in the portfolio. Kratos' technical expertise and reputation for long-standing customer relationships will complement Haverstick's approach, he said.