QinetiQ makes move into the Top 100, creates U.S. IT platform

British defense company QinetiQ Plc has made another push into the U.S. government market with its planned acquisition of Top 100 company Apogen Technologies Inc.

Apogen of McLean, Va., will become a wholly owned subsidiary of QinetiQ's North America operations once the $300 million cash deal closes in September, said Todd Stottlemyer, Apogen's chief executive officer.

Apogen Technologies, a provider of technology solutions to the U.S. government, will retain its name, management team and staff of 900. QinetiQ will use Apogen as its information technology platform in the United States, Stottlemyer said.

The merger will allow Apogen to expand by adding QinetiQ's capabilities to its offerings. The company also will be positioned to pursue business opportunities in the United Kingdom and the rest of the European Union.

Having "a $2 billion company behind us gives us more credibility for larger opportunities," Stottlemyer said.

QinetiQ, pronounced "kinetic," was formed in 2001 when the British government privatized the majority of its Defense Evaluation and Research Agency, part of the U.K. Defense Ministry. It employs more than 12,000 workers in the United Kingdom and the United States, including 10,000 scientists and engineers, and has a U.S. sales operation in Crystal City, Va.

In February 2003, the Carlyle Group, a private equity firm based in Washington acquired a 33.8 percent stake in QinetiQ.

QinetiQ has been building its U.S. presence through acquisitions. In November 2004, it acquired Foster-Miller Inc. of Waltham, Mass., for about $163 million and Westar Aerospace & Defense Group Inc. of St. Louis for $130 million. Foster-Miller provides engineering solutions in fields such as robotics, advanced materials technology and medical devices. Westar provides specialized technology solutions and services to the Defense Department, selected federal agencies, and the aerospace industry. Both are wholly owned subsidiaries of QinetiQ North America, but remain autonomous entities.

On Monday, Foster-Miller announced it was acquiring Planning Systems Inc. of Reston, Va., for $42 million. PSI is a 350-employee company that provides applied science and systems engineering services, IT applications and solutions, and custom products to the federal government and commercial clients. PSI's 2004 revenues were $44.6 million.

The deal for Apogen will be QinetiQ's first acquisition of a Washington Technology Top 100 company. Apogen is No. 48 on the 2005 list, which ranks companies according to their prime contracting revenue.

Apogen had 2004 revenue of $205 million, Stottlemyer said. Its government clients include the Agriculture, Defense, Energy and Homeland Security departments, IRS, Census Bureau, Customs and Border Protection and the Navy.

Apogen itself is a creation of an acquisition strategy and is backed by the equity investment group Arlington Capital Partners. Apogen was created after ITS Services Inc. of Springfield, Va., and Science & Engineering Associates Inc. of New Orleans merged in January 2004.

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