Eagle fuels series of acquisitions

It is well known in the government that companies often turn to acquisitions as a way of accessing important markets and customers.

If you don't have the contracts or the clearances or the relationships, it is often more efficient to buy another company that does.

As the government increasingly turns to large multiple award contracts, having the right procurement vehicle has become even more important. Many of these vehicles are seen as the contract of choice for their home agency and if a company doesn't win a spot on that contract, they risk being shut out of business with that agency.

An example of how this market trend has fueled acquisitions is the Homeland Security Department's Eagle contract. Awarded in June 2006 to 53 companies, the contract is seen as the vehicle of choice for IT services for the Homeland Security Department.

Since its award, nine of the companies have been acquired. Seven of those companies were small businesses. All of the buyers but two were companies that didn't already hold a spot on the contract.

The exceptions, Dynamics Research Corp. and Perot Systems Government Solutions, acquired companies that gave them access to new functional areas under the contract.

Perot acquired QSS Group Inc. and DRC acquired Kadix.

The other deals:
  • ManTech International acquired McDonald Bradley
  • Qinetiq North America acquired 3H Technology LLC
  • Apptis acquired Base One Technologies
  • Bart & Associates acquired Digital Solutions
  • Wyle Inc. acquired RS Information Systems, which owed part of an Eagle contract joint venture, Energy Enterprise Solutions.
  • VSE Corp. acquired G&B Solutions Inc.
  • Harris Corp. acquired Multimax, which owned part of the MultimaxArray joint venture.

The Eagle contract likely wasn't the only factor in many of these acquisitions but it was a deciding factor.

As the use of Eagle continues to expand at DHS, the companies on the contract will become even more tempting acquisition targets.

About the Author

Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.

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