Deltek makes $26M deal for FedSources

Adds rival to Input in bid to broaden research and consulting capabilities

Deltek Inc. has made another bold move in its strategy to be an end-to-end provider of products and data to help contractors win and manage government projects.

The company made a $26 million cash deal March 31 to acquire market research firm FedSources, a rival to Input, a research firm that Deltek acquired in October 2010 for $60 million.

"These are two companies that belong together," Deltek CEO Kevin Parker said.

Deltek is buying FedSources and its affiliate, the Washington Management Group, from Koniag Inc., an Alaska Native Corporation. Washington Management Group provides consulting services to companies that want to win a spot on a General Services Administration schedule. FedSources and Washington Management Group had $15 million in revenue for the year ended March 31.


Deltek acquires Input

"This is a good deal for Deltek in a number of ways," Parker said, adding that FedSources' database is very good, and the Input and FedSources databases don’t completely overlap. "This is an opportunity to expand our research capabilities, and that is a good thing," he said.

Deltek also wants to expand into the state and local and construction and engineering sectors with market research, and this acquisition will help with those efforts, Parker said.

"The energy we put into competing with each other can now be put into expanding into some new areas," he said.

FedSources' consulting capabilities also made it an attractive acquisition as did the Washington Management Group, which "opens a whole new set of customers and markets," he said.

Deltek also plans to use the FedSources and Input databases to enhance the capabilities of GovWin, its online community and tool for companies to find partners and manage subcontractors. 

FedSources and Washington Management Group executives, such as Ray Bjorklund, senior vice president and chief knowledge officer; Bill Gormley, president and CEO; and Joe Caggiano, chief operating officer, will remain with the company.

"This is not an acquisition with cost cutting or expense reduction as its primary objective," he said. "It is aspirational in that we see synergies that are mostly product and revenue related, and that’s where we are focusing our attention."

At first, FedSources and Input will continue to operate as distinct units, but the plan is to integrate them. Catherine Morales will be responsible for both units. She came on board at Deltek in early March as executive vice president of Deltek Information Solutions.

Short-term goals include applying the databases to Deltek’s customer relationship management and business development products in addition to using them to support the subcontracting management capabilities of Deltek’s GovWin network.

"We’ll step back with both teams and look at things like the user interface, the accessibility of data and the visualization of data," Parker said.

Parker said he expects that users of FedSources and Input databases will see the benefits of the acquisition in less than three months.

About the Author

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

Reader Comments

Fri, Apr 1, 2011 Jeff White

This is a significant step as we continue to help our customers navigate the Government marketplace. Deltek is continuing to bring all the information our customers need to make efficient and effective decisions. With, INPUT, and now FSI its all things anyone interested in the government contracting space needs to succeed. Looking forward to supporting our customers even further as we move forward. thanks

Fri, Apr 1, 2011 John K Virginia

"Aspirational?" The aspiration is to take a major competitor out. People in the fed arena know this is a shrinking business with declining profitability. Further, they know GSA thinks it is unconscionable that greenhorn firms need a 25K consultant to get on a schedule. GSA is trying, in the expected government-y way, to make that process easier. People don't need it or find that the predictive track of federal market research is all that impressive. There may be a reason that the historical trail of market growth estimates and studies (and it is always growth, right) published by market researchers of all stripes is hard to find on the net. There are other ways a consultant can help though--if a company is on the clueless and un-energetic side. The big thing coming (already here) is Bloomberg. When B gets around to re-thinking this kind of service, B will wipe it out like a tsunami coming ashore.

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