M&A Roundup: CACI buys intelligence company

In a bid to expand its work with the U.S. intelligence community, CACI International Inc. acquired Applied Technology Solutions of Northern Virginia Inc.

Terms of the deal were not disclosed. Officials of Arlington, Va., CACI said the deal is expected to be accretive to CACI earnings.

Privately held ATS of McLean, Va., offers solutions in information technology, knowledge management, program management, network engineering and training. Most of its nearly 80 employees have high-level security clearances. The company is expected to generate $12 million to $14 million in revenue over the next 12 months, according to CACI.

CACI's services include systems integration, managed network solutions, knowledge management, engineering, simulation and information assurance. It employs 5,900 people in 90 offices in the United States and Europe, and had $681.9 million in revenue in fiscal 2002.

Northrop sells TRW unit

Northrop Grumman Corp. completed its spinoff of TRW Automotive, selling it to affiliates of the Blackstone Group for $4.7 billion. The price includes approximately $3.9 billion in cash and debt retained by TRW Automotive, a $600 million payment-in-kind note, and a 19.6 percent equity investment in the new enterprise.

Cash proceeds from the sale are being used by Northrop Grumman primarily to pay down debt and meet corporate obligations.

"At the time we announced our acquisition of TRW, we stated our intention to separate the automotive business," said Kent Kresa, Northrop Grumman chairman and chief executive officer. "Today, we have delivered on that promise."

With the acquisition of TRW, Los Angeles-based Northrop Grumman became a $25 billion global defense company. It provides products, services and solutions in systems integration, defense electronics, information technology, advanced aircraft, shipbuilding and space technology.

ManTech purchases two firms

ManTech International Inc. of Fairfax, Va., has made two quick deals in succession, announcing plans to buy MSM Security Services Inc., a personnel security investigations firm, and completing the acquisition of Integrated Data Systems Corp., which has a strong presence in the defense and intelligence communities.

ManTech will purchase MSM of Greenbelt, Md., in a cash deal worth $5.25 million. The company bought IDS of Chantilly, Va., for $62.7 million.

IDS has developed secure, advanced messaging and collaboration applications and solutions in support of national security networks and systems. More than 80 percent of IDS' 230 employees hold top-secret security clearances with special access to sensitive compartmented information programs, according to a statement from ManTech.

Senior IDS executives will continue in their current positions, and IDS will operate under ManTech's National Security Solutions Group, ManTech officials said.

ManTech provides IT and technical services solutions to the Department of Defense and intelligence community customers. The company has more than 4,400 employees and had $431.4 million in revenue in 2001.

IDS provides technology solutions and products in four main areas: software development, systems engineering and networking, information assurance, and government acquisition and procurement support software. Its customers include civilian and military intelligence organizations such as the CIA, National Security Agency, Defense Intelligence Agency and Department of Defense special programs.

The firm had about $40 million in revenue in 2002, up from $21 million in 2001.

Robert Coleman, founder, president and CEO of IDS, said his firm's acquisition by ManTech will allow its business to grow quickly while maintaining high-quality customer service.

Quarterdeck Investment Partners LLC of Los Angeles acted as financial adviser to ManTech on the transaction. BB&T Capital Markets of Richmond, Va., represented IDS.

In the MSM deal, Bradley Feldmann, president of ManTech's Information Technology Solutions Group, said the acquisition will enable ManTech to expand service areas in support of priority national security programs for the Defense Department and intelligence community.

After the purchase finishes, MSM will operate as ManTech MSM Security Services Inc., under ManTech's Information Technology Solutions Group. ManTech's investigative services business operations will be folded into ManTech MSM.

MSM President William Early Whaley will continue in his position, ManTech said.

MSM specializes in personnel security investigations services to the federal government. The company has about 100 employees and annual revenue of $19.9 million. It also maintains a nationwide network of about 1,800 contract investigators that support the company's mission.

MSM has contracts with the U.S. Customs Service, Defense Security Service, National Security Agency and other federal agencies.

The two companies previously formed a joint venture that won a $50 million contract from the Naval Air Systems Command to provide services to supplement the background security investigative services capabilities of the Defense Security Service.

Since conducting its initial public offering in February 2002, ManTech has made four acquisitions: Aegis Research Corp. of Falls Church, Va., in August 2002, CTX Corp. of Vienna, Va., in December 2002, and now IDS and MSM.

Perot closes Soza deal

Perot Systems Corp. has completed its acquisition of Soza & Company Ltd., increasing its government services unit to more than 1,500 employees and more than $200 million in annual revenue.

Perot Systems, based in Plano, Texas, announced its plans to acquire the Fairfax, Va., systems integrator early in February. The acquisition closed Jan. 25. Perot Systems purchased Soza for $75 million in cash, plus up to $32 million in cash and stock if certain performance targets are met.

With the acquisition, Perot Systems gains a foothold with such federal agencies as the departments of Defense, Transportation, Agriculture, Health and Human Services, the Environmental Protection Agency and Coast Guard, as well as state and local governments.

Founded in 1988, Perot Systems Corp. entered the government sector with its July 2002 purchase of ADI Technology Corp., which it renamed Perot Systems Government Services. Perot Systems employs more than 9,000 people, with revenue of $1.3 billion in fiscal 2002.

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