BDM vets lead acquisition of ITS Services

Three veteran executives of information technology companies serving the federal marketplace, backed by the private equity firm Arlington Capital Partners, announced Thursday that they had acquired ITS Services Inc., Springfield, Va.

ITS Services is a privately held provider of information technology solutions to federal government agencies.

Todd Stottlemyer, a former senior executive at BDM International, and Paul Leslie, who led BDM's systems development and integration business unit, will lead day-to-day operations of the company. Stottlemyer will be chief executive officer of ITS Services, and Leslie will be president and chief operating officer.

Phil Odeen, former president and chief executive officer of BDM and recently chairman of TRW Inc., will serve as chairman of the board of directors.

To finance the acquisition of ITS Services and future growth of the company, Arlington Capital Partners of Washington committed substantial equity capital to back the management team to invest in organic growth and strategic acquisitions, officials said. The acquisition is part of Arlington Capital Partners' $75 million equity commitment to consolidate several federal IT services companies.

"With ITS Services as the foundation company, we intend to create a premier, midtier IT services provider," said Jeffrey Freed, managing director of Arlington Capital Partners.

In addition to Arlington's investment, debt financing was arranged with Wachovia Bank, Allfirst Bank, Citizens Bank and Allied Capital. Terms of the acquisition were not disclosed.

ITS Services, which was founded in 1991, has more than $70 million in annual revenue. The firm specializes in three areas: enterprise architecture; network services and operations; and software and applications development. ITS Services founders Angela Mason and Ram Prasad will remain with the company during a transition period and will continue as shareholders of the company.

"We are very pleased that we will be transitioning leadership of the company to people who have the experience and commitment to lead the company forward," Mason said.

ITS Services customers include the U.S. Customs Service, Census Bureau, Department of Agriculture, Secret Service, Small Business Administration, U.S. Mint, Drug Enforcement Administration, Internal Revenue Service, General Services Administration and the Department of Veterans Affairs. The firm has positions on a wide array of governmentwide contracting vehicles, Leslie said.

"We are convinced that the federal government will increasingly outsource information technology work to third-party contractors. We intend to fill the current void of large, yet nimble, contractors in the $200 million to $500 million size range in order to meet the government's increasing needs," said Michael Lustbader, vice president at Arlington.

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