TechTeam to acquire Sytel
- By William Welsh
- Jan 04, 2005
TechTeam Global Inc. has acquired Sytel Inc., a network services and enterprise solutions provider, for $18.5 million in an all-cash deal, the company announced today. The deal closed Jan. 3.
The terms of the transaction include an additional cash payment of $2 million if Sytel wins a contract renewal. The contract expires this year, but company officials declined to identify the contract.
The acquisition of Sytel of Bethesda, Md., will add substantial new government customers and further enlarge Southfield, Mich.-based TechTeam's professional services and systems integration business segment, the company said.
Sytel posted revenue of about $21.1 million and net income of about $1.35 million for the nine months ending Sept. 30, 2004. The company also reported revenue of $28.3 million and net income of $1.36 million for fiscal 2003.
The acquisition adds about 300 new employees to Tech Team's 1,700 employees, said David Morgan, Tech Team's vice president, chief financial officer and treasurer. The company expects annual sales of about $130 million in 2004, up from $88 million in 2003, he said.
Jeanette Lee White will remain president and chief executive officer of Sytel, which will become a subsidiary of TechTeam, Morgan said.
Sytel's government customers include the Export-Import Bank, Drug Enforcement Agency, National Institutes of Health, and the departments of Commerce, Health and Human Services, Homeland Security, and State.
The Chesapeake Group served as investment advisers to TechTeam, while the Windsor Group LLC served as investment advisers to Sytel. Butzel Long PC served as legal counsel to TechTeam.
William Welsh is a freelance writer covering IT and defense technology.