DRC makes $143M deal for health care, military tech firm

Dynamics Research Corp. has agreed to pay $143 million in cash to acquire High Performance Technologies Inc., a privately held provider of high-end technology services, primarily to the federal health care and military technology markets.

HPTi, of Reston, Va., has customers at Veterans Affairs, Treasury and Justice departments and intelligence and defense agencies. It's work includes support for architectures and development involving emerging technologies, according to the June 3 announcement.

The company reported $90 million in revenue in 2010 with nearly 80 percent of sales aligned with DRC's target growth markets, including, cybersecurity, intelligence, civilian financial agencies and homeland security, DRC said in a release.

The acquisition expands DRC’s capabilities within the federal health care and military technology spaces.

For example, military health care, a sector in which DRC did little business just five years ago, now accounts for more than $30 million in annual revenue for the company, supporting programs like the Defense Center of Excellence and the creation of the new Walter Reed Army Medical Center.

The acquisition of HPTI will add about 440 employees, mostly in the D.C. metro area, said Paul Strasser, senior vice president and general manager of DRC’s federal group.

HTPi fits into DRC’s five strategic markets – homeland security, cybersecurity, healthcare, intelligence and financial and regulatory agencies, Strasser said.

“Eighty percent of their business fits into one of those categories,” he said. “The other 20 percent is in strategic DOD, which is sort of our sixth area” and both companies have a strong footprint with the Army.

Strasser also pointed out that HTPi is “very strong at VA [whereas] we’re sort of an infant there.”

In addition, HTPi’s work at VA is similar to what DRC is doing for the DOD’s Military Health System.

HPTi President Tim Keenan will report to DRC Chairman and CEO Jim Regan as corporate development and strategy adviser.

HPTi COO Scott Miller will continue his leadership role for HPTi operations and also report to Regan.

The closing is expected by June 30.

KippsDeSanto & Co. is acting as exclusive financial adviser to HPTi in this transaction.