M&A

Former DynCorp, Sparton owner acquires government IT firm

Private equity firm Cerberus Capital Management has made another investment in the government market through its acquisition of NetCentrics Corp., an enterprise IT and telecommunications services provider to federal agencies and private industry.

Terms of the transaction announced Wednesday were undisclosed. In conjunction with the deal, NetCentrics has hired 25-year public sector market veteran and former Avantus Federal executive Kenny Cushing as CEO.

Herndon, Virginia-headquartered NetCentrics also touts cybersecurity as among its core areas of focus with customers such as the Army, Coast Guard, Defense Information Systems Agency and other Defense Department components.

NetCentrics was itself acquired in 2014 by Haystax Technology but has since operated as a subsidiary of the latter, whose board of directors decided in 2015 to let the businesses operate separately. Data from USASpending.gov indicates NetCentrics was obligated nearly $7 million from federal agencies in the government's 2021 fiscal year that ended Sept. 30.

Trouble emerged for NetCentrics two years ago, when the company won an incumbent $268.5 million contract with the Defense Department’s lead entity for providing IT services to Pentagon and other customers in the Washington, D.C. metropolitan region.

Rival bidder NCI Information Systems protested and was later on awarded the contract through a redo, after which NetCentrics notified the state of Virginia that the company planned on 95 employee layoffs.

For Cerberus, its acquisition of NetCentrics represents that investment firm’s latest foray into the government market and comes nearly six months after the most recent high-profile exit of Sparton Corp.

Elbit Systems of America acquired Sparton for $380 million in April after nearly two years of Cerberus’ owning the company.

Cerberus is also known as the former owner of DynCorp International, which Amentum acquired in late 2020.

Cushing was most recently senior vice president of Avantus’ defense segment. Prior to that, he was the senior Defense Department official at the Homeland Security Department’s Cybersecurity and Infrastructure Security Agency for nearly two years.

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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