PAE expands footprint with FCi deal
By
Nick Wakeman
PAE is buying a former rival and expanding its portfolio with a deal to acquire FCi Federal.
In its first deal since being acquired itself, PAE has returned to its role as a buyer in the federal market.
PAE plans to buy FCi Federal for an undisclosed amount and adds several new capabilities to its portfolio.
This deal is the first PAE has announced since it was acquired in June 2016 by Los Angeles-based investment group Platinum Equity.
Under previous owner Lindsay Goldberg, PAE closed several deals between 2011 and 2015 including the acquisitions of Defense Support Services, Computer Sciences Corp.’s Applied Technology Division, USIS' Global Security & Solutions business and A-T Solutions.
All of those deals brought new lines of business and capabilities to PAE beyond its traditional logistics and capacity building business with USAID and the Defense Department.
Through the deals, PAE has added capabilities such as range and space support and professional services focused on national security customers.
With FCi, PAE will pick up capabilities around operations management, credentialing and eligibility processing as well as information management, program support and constituent services.
FCi also is a company that PAE battled with in 2015 after it acquired Global Security & Solutions from USIS. Both companies wanted to win the Homeland Security Department’s field office support services contract, known as FOSS. FCi was the incumbent and twice successfully protested awards to Global Security & Solutions. DHS eventually cancelled the contract.
As part of PAE, FCi will operate as a business unit of PAE and will continue to be based out of its current headquarters in Ashburn, Va. The deal is expected to close over the next 45 days. Houlihan Lokey served as an advisor to FCi.
FCi expands PAE’s portfolio of services focused on the essential mission of government, CEO John Heller said in a statement.
“It’s a great strategic fit, presenting new opportunities for both of our companies,” he said.
FCi was founded in 1991 by Sharon Virts. She said being acquired was the best move for FCi at this stage of its development.
The company has grown rapidly in recent years thanks to large contract wins with the Homeland Security and State departments. In 2015, it won the DHS U.S. Customs and Immigration Services National Benefits Center contract, which is worth $461 million over five years.
“Today’s announcement is the right path to position FCi Federal for continued phenomenal growth,” Virts said.
The deal also represents Platinum Equity’s commitment to PAE.
“We are delivering on our promise to invest in PAE’s long-term strategy and will continue looking for new opportunities to expand organically or through additional acquisitions,” said Louis Samson, a partner with the private equity group.