Harris makes play for Multimax
- By Nick Wakeman
- Jun 09, 2007
Another acquisition player in the federal market has made the switch from buyer to seller. Multimax Inc. has agreed to be bought by Harris Corp. in a $400 million deal.
For Harris, the acquisition expands the Melbourne, Fla.-based company's technical services business and its access to large governmentwide acquisition contracts.
Multimax of Herndon, Va., brings several GWACs to Harris, including the Army's Information Technology Enterprise Solutions 2 Services and the Air Force's NetCents contracts. The all-cash acquisition is expected to close by June 29, Harris said.
Multimax had been evaluating growth strategies during the past six to seven months, Carleton Jones, the company's chief executive officer, told Washington Technology. The strategies included becoming a publicly traded company and continuing as a private company that would make more acquisitions. But as they went through the evaluation process, selling the company emerged as the best alternative, he said.
"There was a lot of interest in buying Multimax," Jones said. The company currently is owned by Cerberus Capital Management LP, a private equity firm.
Harris cinched the deal over other suitors because it is in a similar market ? information technology and communications ? and Harris is dedicated to the federal sector, he said. Multimax also is a subcontractor to Harris on its Federal Aviation Administration Telecommunications Infrastructure contract.
"We know them, and they know us," he said.
The company also is one of the largest subcontractors to EDS Corp. on the Navy Marine Corps Intranet contract, Jones said.
Jones said he will help with the transition to Harris and then retire. But he added that he plans to remain active in the federal contracting community.
For the year that ended March 31, Multimax had about $315 million in revenue and $55 million in operating income. The company also has about 1,100 employees. About 85 percent of the employees have security clearances.
Jones said only about $40 million in Multimax revenue is not related to Defense Department customers.
Multimax will become part of Harris Technical Services Corp., based in Falls Church, Va. John Heller, Multimax's president and chief operating officer, will become the vice president of the company's defense IT programs. Karl Williams, Multimax chief financial officer, will become vice president of civilian IT programs. Both will report to Ted Hengst, the president of Harris Technical Services.Editor Nick Wakeman can be reached at email@example.com.
Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.