Deltek makes $60M deal for Input

Deltek Inc. announced this morning that it is buying market research firm Input in a $60 million cash deal.

The acquisition is part of Deltek’s strategy to broaden its offerings to government customers.

Traditionally, Deltek focused on back-office accounting, but “over the last five years, we’ve expanded to more program and project management and business development capabilities,” said Kevin Parker, Deltek’s president and CEO.

Input adds market analysis and contract data to the mix. The deal, which is expected to close Oct. 1, is Deltek’s eighth acquisition since 2005 and one of its largest, Parker said.

The acquisition of Input is bringing an additional $26.2 million in annual revenue and about 200 employees. In 2009, Deltek had $265.8 million in annual revenue. Input helps government contractors identify and develop new business opportunities.

The Input deal dovetails with Deltek’s acquisition of mySBX, an online network for building and managing partners that the company bought in December 2009, Parker said.

Deltek can now offer software and services around market intelligence, business development, collaboration, project management and financial management. “We can cover the entire life cycle of a project and what it means to be a government contractor,” Parker said. “How do I find business, how do I close it, how do I deliver it, how do I account for it and report it. To us, it is a unique capability to bring together.”

In a statement, Input Chairman Peter Cunningham said, "The combination of Input with Deltek makes for a perfect match to accelerate our growth and commitment to our members."

Deltek plans to invest and expand Input’s research and analysis capabilities, and Deltek will be looking to broaden Input’s reach into other markets that Deltek serves, particularly the architecture and engineering industry in which the company provides project management software and other products to 9,000 customers, Parker said. The company also is interested in expanding into the state and local market and other government verticals.

“We recognize that they have very unique capabilities, so how can we invest in them to accelerate their growth?” Parker asked.

It was widely known in the government market that Input had been for sale, and rumors about potential buyers, such as private equity groups and digital media company Bloomberg, have circulated for a while. Parker would not comment on other bidders.

Deltek’s interest in Input goes back more than a year when the company began informal conversations with Cunningham, Parker said. More formal negotiations began in early summer as Input initiated the sales process.

The company had Input in mind in when it acquired mySBX in December 2009, Parker said. “MySBX was a good acquisition, but we were always thinking how can we bring these two together,” he added.

MySBX, now known as GovWin, came on board with about 10,000 members who used the network to look for and collaborate with partners on government contracts. It now has 15,000 members and is expected to grow to 20,000 to 25,000 by the end of the year, Parker said.

Parts of Input might migrate to GovWin, and parts of GovWin will shift to Input, but both will remain distinct business units, he said.

Input’s management team of Kevin Plexico, Brian Haney, Mary Beth Cockerham and Kevin Gates will make the transition to Deltek. Parker said Cunningham will not have an operational role in the company but will be an adviser to Parker.

Deltek is looking at several areas in which Deltek’s and Input’s capabilities can be combined for new offerings.

That includes expanding Input’s research capabilities into new markets, creating a tool to help companies identify and manage organizational conflicts of interest, and developing tools for managing subcontractors, Parker said.

“This is something we’ve thought about for a very long time,” he said. “I’m convinced that after the first 90 days we’ll look back and see that Deltek and Input have done something together that neither of them could have easily done on their own.”