Ross Wilkers

M&A

Peraton's systems engineering business to go it alone as new company

Veritas Capital acquires unit through its Vantage Fund

Private equity firm Veritas Capital did not look too far afield to identify acquisition number one for its “Vantage Fund” focused on the government market’s middle tier.

Veritas portfolio company Peraton said Thursday it is parting ways with the systems engineering, integration and support services business it calls "SES." The acquirer is CTFV Acquisition Corp., a portfolio company of The Veritas Capital Vantage Fund LP.

CTFV is the temporary name for the standalone company that will eventually take on a new name and identity. That company’s CEO will be Damian DiPippa, a three-decade federal market veteran who has led that business at Peraton since April.

DiPippa joined Peraton through its combination with Perspecta, where he led that company’s intelligence group. The Peraton SES business likely traces its history to the former Vencore, which was one of the three big pieces that formed Perspecta three years ago.

While not said explicitly, Peraton’s announcement of the transaction implies that eliminating organizational conflicts-of-interest between the SES unit and rest of the company drove the deal. Businesses like SES advise federal agencies on major acquisition programs that a company like Peraton either performs on or bids for.

Separating “the SES business and Peraton enables each company to independently focus its core capabilities to meet the mission needs of its respective defense and intelligence community customers,” Peraton said.

For Peraton, this divestiture comes within two weeks of the company's announcement that it acquired the Vion Corp. cloud services business that has an artificial intelligence as-a-service offering.

Then there is who the buyer of SES is and more importantly how. In Spring 2021, Veritas completed a $1.8 billion fundraising round for the Vantage Fund that will continue that investment firm’s near-exclusive focus on markets involving technology and government.

Health care, education, software, communications and energy are also in Veritas’ swim lane as government-influenced sectors in addition to pure-play federal contractors such as Peraton.

Vantage Fund investments require less equity capital than the larger investments out of Veritas’ flagship funds, including the seventh fund that closed in late 2019 with $6.5 billion in commitments.

Jefferies served as financial adviser to Peraton. Milbank LLP and Covington & Burling LLP served as legal counsel to Peraton. Latham & Watkins LLP served as legal counsel to the Veritas Vantage Fund.

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 connect with him on LinkedIn.

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