WT Business Beat

By Nick Wakeman

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Nick Wakeman

Versar deal shows signs of turnaround

Four years ago, there was a real fear that Versar could disappear.

The project management contractor was bleeding red ink at the time. The New York Stock Exchange halted trading of its stock and had begun delisting procedures.

Shares were trading at 48 cents when Kingswood Capital Management came in and offered 15 cents a share to buy Versar. The private equity group put one of its own operating executives in charge.

Since then, things have been pretty quiet.

But in a sign of what could be an emerging comeback story, Versar has announced its acquisition of BayFirst Solutions Inc.

BayFirst will add capabilities around network engineering, cybersecurity and intelligence support to Versar’s project management offerings.

BayFirst will operate as a division of Versar and will continue to be led by CEO Kevin Gooch. BayFirst President and Founder Robert Rice will join Versar’s board.

BaryFirst’s largest customer is the Homeland Security Department. Part of the strategy is to take expand access to Versar’s customer base, which includes the departments of Defense and Interior, according to USASpending.com.

Terms of the transaction were not disclosed. According to USASpending.gov, BayFirst had $15 million in prime contracts during government fiscal year 2020.

Even before the acquisition, Versar was showing some signs of improvement.

Between fiscal 2016 and 2017, the company saw its prime contracts plummet from $45.1 million to $6.5 million.

But since the acquisition by Kingswood, the company has grown steadily:

  • Fiscal 2018: $19.6 million
  • Fiscal 2019: $22.6 million
  • Fiscal 2020: $25.5 million

Versar also has grown to over 400 employees working at 13 locations.

G Squared Capital Partners, DLA Piper LLP and Saggar & Rosenberg advised BayFirst. Goodwin Procter and Grant Thornton advised Kingswood.

Posted by Nick Wakeman on Jun 02, 2021 at 1:05 PM

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