Ross Wilkers

M&A

Centauri's first acquisition targets directed energy work

Centauri has made its first acquisition since the defense technology integrator opened under its current brand in April as a combination of three companies held by private equity firm Arlington Capital Partners.

In its deal announced Tuesday to buy Kord Technologies, Centauri adds a more significant footprint with the Missile Defense Agency and Army to check the acquirer’s typical box of increasing customer access through such transactions.

Terms of the deal were undisclosed but Kord will add roughly 250 employees to Centauri, whose workforce grows to almost 1,600 staffers.

Huntsville, Alabama-based Kord also gives its buyer a greater presence in the field of directed energy technology and particularly high-energy lasers as the U.S. military wants to get those platforms into the field faster, Centauri CEO Dave Dzaran recently told me.

Dzaran pointed out that the technology “has largely existed for a number of years,” but one thing that has changed is the ability to more quickly “bring that to the tactical edge” and help defend soldiers during their missions.

The U.S. military wants directed energy platforms including laser weapons given their potential for pinpoint accuracy and nearly infinite supply of power and ammunition, not to mention cost to maintain and refresh. In its fiscal year 2020 budget plan, the Defense Department sought $235 million in spending for directed energy capabilities.

“Directed energy has a number of different advantages with respect to how it’s employed over conventional munitions,” Dzaran said. “What we’re going to be able to do together, is to help bring that (and) make it more readily available for our Army and troops on the ground.”

In the case of Kord itself, Dzaran added it “has been engaged in advanced material science that would help enable next-generation systems, specifically hypersonic weapons, and understanding how they can be developed more readily and to make that technology more feasible.”

Founded in 2008, Kord brings to Centauri a potential $484 million contract it secured in July to lead the development and integration of laser weapon systems of the 50-kilowatt-class of Army Stryker combat vehicles.

What the deal essentially does for Centauri is place it at the front end of the technology development cycle. But companies like Kord and now hence Centauri are being also tapped to more rapidly prototype them under a three-year timeline versus traditionally longer periods, Dzaran told me.

“It’s important to demonstrate that these things can be developed through agile methods and be able to demonstrate the potential in short order,” Dzaran said, “in order to keep momentum going and show the technical hurdles can be overcome.”

The contract Kord won falls under that category as it is an Other Transaction Authority agreement, a type of award that is made outside of traditional procurement processes. Kord will lead a team that includes subcontractors Northrop Grumman and Raytheon to deliver four such lasers on a platoon of four Strykers by 2022.

New methods such as those to more rapidly acquire and field new technologies is leading companies to modify how they work through such efforts.

“In order to have first pass success, you do less by trial and error and more by carefully applying deep experience and advanced methodologies to address risks, be able to manage them effectively and to enjoy that early success,” Dzaran said.

Looking for acquisitions like Kord has not been Centauri’s only priority since it launched with the current name. In June, Centauri announced it hired three-decade government market veteran Dennis Kelly as chief operating officer.

Kelly helps steer Centauri’s organic and inorganic growth strategy and essentially acts as its lead talent acquisition executive versus how many companies have chief human resource officers or other equivalent positions.

“We’ve moved it right into operations, so that we can (help) the folks have the best understanding of what skill sets are needed for critical positions and be able to bring in new talent, but also much more effectively help career development for our folks,” Dzaran said.

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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