TechnoMile acquires SIMS Software, adding facility security and more AI to its platform
Gettyimages.com/ Eugene Mymrin
By
Nick Wakeman
Capitol Meridian Partners is backing TechnoMile's move to expand its lifecycle management offerings from pre-award management to post-award compliance.
TechnoMile is adding more capabilities to its platform for managing the government contract lifecycle through its acquisition of SIMS Software.
The transaction announced Monday brings together TechnoMile’s pre-award and post-award contract management solutions with SIMS’ facility security and compliance tracking software. Financial terms were not disclosed.
TechnoMile is making the deal with the support of a new private equity backer in Capitol Meridian Partners, which will own a majority stake in the combined company.
Senior leaders of both companies, including the CEOs, will retain equity stakes in the company. This transaction is an exit for K1 Investment Mangement, TechnoMile’s former backer.
TechnoMile connected with SIMS because the company was looking for a buyer, TechnoMile CEO Ashish Khot said.
“We were aware of that and to make it happen we got introduced to CMP,” Khot said.
CMP's other backings in the market include LMI, Clarity and Parry Labs.
The offerings of TechnoMile and SIMS are complimentary, Khot said.
TechnoMile brings software products for market intelligence, capture management and pipeline management on the pre-award side. Post-award, the company offers tools for managing prime contracts, subcontracts, and compliance.
SIMS brings more post-award capabilities around facility tracking, facility management, clearance tracking and compliance associated with classified contracts. Khot said that SIMS' security focus is on facility security and compliance management, not cybersecurity.
SIMS tracks cleared personnel, manages access to secure facilities, and helps contractors maintain compliance with requirements for classified contracts — including those under Foreign Ownership, Control, or Influence.
"When you bid on a contract, you want to know: does this require secure facilities? Does it require cleared people?" Khot said. "SIMS has all of that capability. So, it is a logical integration into TechnoMile's product family."
Both companies also have artificial intelligence capabilities, but in complementary areas.
“More and more companies are asking for AI-enabled workflow software that can span the lifecycle of a contract,” he said. “This is all the way from identifying the opportunity through staying compliant.”
TechnoMile and SIMS have built AI solutions that focus on identifying risks in contracts ahead of making a bid decision, as well as monitoring risk going forward.
The combined company will have about 350 customers. TechnoMile will also expand on the West Coast, where SIMS is headquartered in Carlsbad, California. SIMS will become a new product line for TechnoMile.
SIMS brings a new customer set to TechnoMile – government customers.
Agencies have asked TechnoMile to provide its contract management software, but the company has always hesitated.
"We took a cautious approach until now to stay focused on this pure B2B use case," Khot said. "But now with the new capital partner, we now have ability to even expand that."
The SIMS management team is staying on board with CEO Michael Struttman becoming the chief business development officer for the combined company.
The acquisition of SIMS is part of TechnoMile’s strategy to build an end-to-end platform for managing contracts. The company’s future mergers and acquisition plans will focus on continuing to build that platform.
On the capability side, the company is looking to add capabilities to its market intelligence products as well as proposal writing and proposal development capabilities. Post-award asset management tools and advanced subcontractor management are areas of interest.
“Obviously, we'll be looking into AI innovation in this space that continues to accelerate the customer expectations,” Khot said.
Khot declined to share revenue goals, but said the company wants to achieve the “Rule of 40” benchmark for software companies — where the revenue growth rate plus the profit margin exceeds 40%.
“That’s our growth thesis,” he said.
William Blair acted as financial adviser to Capitol Meridian Partners, whose legal adviser was Latham & Watkins LLP. Baird was financial adviser to TechnoMile, whose legal adviser was DLA Piper. KippsDeSanto & Co. worked as financial adviser to SIMS Software, whose legal adviser was King & Spalding. Monroe Capital LLC provided debt financing for the transaction.