Axiologic Solutions spent a full year on putting the personnel and financing in place to close its first acquisition, which sees it buy Knowledge Link to gain a new intelligence customer and more capabilities.
Axiologic Solutions didn’t fool around when it came to making its first acquisition. In buying another emerging middle tier company, Axiologic has effectively both doubled its size by revenue and by number of employees.
Axiologic has acquired Knowledge Link, a provider of financial management and other services primarily to the National Geospatial-Intelligence Agency. Terms of the deal were not disclosed, but Axiologic executives told me Knowledge Link adds 100 employees to Axiologic’s 140. Revenue-wise, the deal pushes Axiologic from about $50 million to $90 million.
The acquisition fits several strategic goals Axiologic established. Knowledge Link brings new capabilities and a new customer in NGA. This complements Axiologic’s base with the Defense Intelligence Agency, where it provides a variety of services around systems engineering, cloud migration, cybersecurity and acquisition support.
The deal also checks the box on culture, with both companies very focused on employee development. During our conversation, Axiologic executives came back several times to how this deal will open more professional development and career advancement opportunities for both sets of employees.
With Knowledge Link in tow, Axiologic Managing Partner Thomas Stauber said the company has more past performance qualifications and capabilities that will accelerate its organic growth going forward.
But besides the strategic objectives for Axiologic, the deal stands out for other reasons as well. The transaction is the culmination of two years of preparation by Axiologic.
“We had been looking at what we could do inorganically that could fuel our growth,” Stauber said.
That process began about two years ago when the company began looking at how it could make acquisitions.
One step involved looking at whether to partner with a private equity firm as so many other emerging middle-tier companies have. But that wasn’t in the cards for Axiologic.
“It was very enticing,” said Michael Chavira, managing partner of Axiologic. “But we also bounced the idea off our advisors and they looked at our financials and said, ‘Why don’t you do this yourselves?’’
So for now that is what they are doing. They worked with their bank Atlantic Union for the financing of the deal.
But even before starting to negotiate with Knowledge Link, Axiologic had internal work to do. Over the last year, they’ve built out their senior management team by adding Chief Technology Officer Louis Chabot and Andy Baratta as president.
Axiologic also is creating a chief program management officer who will focus on personnel and delivery.
“That will solidify better delivery and allow us to better enable our employees’ growth,” Chavira said.
They also are bolstering business development and corporate operations as the company doubles in size, he said.
And of course, they have been working with Atlantic Union to make sure they had the financing in place to make a deal.
For now, Knowledge Link will operate as a wholly owned subsidiary as it pursues a major recompete at NGA -- a multiple-award, task order contract called Clover. The predecessor contract is known as Emerald.
That solicitation is expected in the first half of this calendar year. Axiologic will be able to add its past performance to Knowledge Link’s as it pursues the $849 million contract, Barratta said.
Even with a deal that doubles its size, Axiologic is positioned to continue making deals on its own and could close one to two a year, Barratta said.
The criteria is the same one they used for Knowledge Link -- complementary capabilities, new customers and a strong employee culture.
Some attractive capabilities include data science, data analytics and systems engineering. The customer based is solidly focused on the intelligence community, Stauber said.