M&A

REAN Cloud agrees to be acquired by Hitachi arm

Herndon, Virginia-based systems integrator REAN Cloud has agreed to be acquired merely months after it saw a $950 million federal contract first get drastically scaled back and then canceled altogether.

Hitachi Vantara, a Silicon Valley subsidiary of Japan-based Hitachi, said Tuesday it plans to purchase REAN Cloud under terms that were undisclosed. The subsidiary seeks to bolster its offerings in secure enterprise cloud adoption and migration, application management, artificial intelligence and machine learning.

REAN also develops tools for Internet of Things environments and predictive analytics, both of which were brought in through the company's acquisition of 47Lining last year.

The federal subsidiary of Hitachi Vantara will offer REAN's products and services to government agencies, it said in a separate statement Tuesday. Reston-based Hitachi Vantara Federal said many of its current federal customers already work with REAN.

REAN also touts partnerships with commercial IT giants like Amazon Web Services and Microsoft as part of a broad portfolio of cloud migration, cloud application development and managed services for agencies.

In February, REAN received a $950 million production "other transaction authority" contract from Transportation Command after the company developed a prototype commercial cloud migration setup for Transcom.

Then in March, the Defense Department cut the contract's value by more than 90 percent to $65 million and narrowly tailored the deal to only Transcom. DOD's Defense Innovation Unit Experimental organization also known as "DIUx" worked with Transcom to develop the contract but senior Pentagon leaders decided the deal was too broad despite their appreciation by DIUx to accelerate cloud adoption.

Oracle protested the contract and the Government Accountability Office sustained the protest in May on grounds that Transcom did not follow the legal requirements in awarding the OTA to REAN.

Industry observers noted REAN's partnership with Amazon Web Services at the time amid the Defense Department's closely-watched $10 billion "JEDI" cloud computing contract. Some critics believe DOD tailored the JEDI acquisition in favor of AWS.

Citi was the financial adviser to Hitachi Vantara, William Blair and MVP acted as financial advisers to REAN.

Hitachi Vantara and its federal arm launched in October of last year after the parent company combined three businesses to further align Internet of Things, big data and analytics work under one roof.

The following month, Hitachi Vantara Federal closed its deal to take in Brocade Federal's classified contracts and employees. That transfer took place in conjunction with Singapore-based Broadcom's purchase of Brocade, which had to jettison its classified portfolio because of the new foreign ownership.

About the Author

Ross Wilkers is a senior staff writer for Washington Technology. He can be reached at rwilkers@washingtontechnology.com. Follow him on Twitter: @rosswilkers. Also find and connect with him on LinkedIn.

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