ECS adds Blackstone Federal to expand DHS business
ECS Federal and its parent ASGN Inc. have closed an $85 million deal to acquire the federal division of Blackstone Technology Group.
Blackstone Federal provides services such as agile application development, cloud modernization, systems architecture, cybersecurity, user experience design and branding services. This deal adds about 100 employees to ECS and will be integrated into its enterprise solution group, which provides digital solutions to civilian customers such as the Homeland Security Department.
This comes almost exactly a year after ECS acquired DHA Group for $45 million for new work with the FBI and other agencies in the law enforcement and security areas.
Arlington, Virginia-based Blackstone Federal recorded $44 million in 2019 revenue and expects 10-percent sales growth in 2020.
Blackstone Federal holds prime spots on several large multiple-award contract vehicles such as DHS' ADaPTS, Eagle II and Enterprise Service Delivery Office. The company is also on the General Services Administration's Schedule 70, MOBIS and Alliant Small Business procurements.
“This acquisition fits perfect with ASGN’s hybrid growth and capital allocation strategy, to scale ECS to over $1 billion in revenue through a combination of strong organic growth and complementary acquisitions,” ASGN CEO and President Ted Hanson said in a release.
“Both ECS and Blackstone Federal share innovative and solutions-driven cultures focused on the customer, collaboration, and quick decision-making,” ECS President George Wilson added. “We’ve also both worked hard to deliver the most powerful technologies, tools and strategies to our DHS customers,” he said.
The structure of the deal also includes 31,000 shares of restricted stock awards to seven Blackstone Federal employees. Vesting in the stock requires they stay with ECS Federal. Half of the grants will vest on the second anniversary of the deal; 25 percent more will vets on the third and then the rest on the fourth anniversary.
Those stock awards are considered “employment inducement awards” under New York Stock Exchange rules.
ASGN used Sullivan & Cromwell LLP as a legal counsel on the transaction. DC Advisory served as exclusive financial adviser to Blackstone Technology Group and DLA Piper LLP served as legal counsel.
Posted by Nick Wakeman on Jan 27, 2020 at 12:26 PM