Illinois tech institute spins off employee-owned company
- By Patience Wait
- Jan 07, 2003
After 66 years under the aegis of the Illinois Institute of Technology, the non-profit consulting company IIT Research Institute has spun off into a new, employee-owned business called Alion Science and Technology Corp.
All of IITRI's former divisions except for life sciences became part of Alion.
The McLean, Va.-based company, announced Jan. 6, was created through a leveraged employee buyout of approximately $130 million, plus warrants held by IIT and the assumption of certain liabilities. The company expects revenue of between $225 million and $230 million and has 1,650 employees.
Employees transferred funds from their eligible retirement account balances into a newly created employee stock ownership plan, which then acquired all the common stock of Alion. A group of outside lenders provided senior debt, while IITRI provided subordinated debt.
"The research and development industry has changed and grown significantly since IITRI was established in 1936," said Bahman Atefi, Alion's chairman and chief executive officer. "Today competition for R&D dollars and people is fierce. Employee ownership is a unique discriminator in the current marketplace, and by transitioning to an employee-owned company our employees can benefit from their hard work."
Setting up Alion as a standalone company was an important step in positioning the business for future growth, Atefi said. The new board of directors for Alion includes three retired generals, who understand the company and the government customers it serves, he said.
Alion's business units operate in a wide range of technical fields, including modeling and simulation, chemical and materials analysis, information technology systems and services, explosives handling (including decontamination and remediation), and wireless communications. The company will be hiring 50 to 60 people in the next few months, Atefi said.