Federal solution provider NCI has acquired Computech for $56 million, in a move the company said will help diversify its customer base across federal customers and grow its topline revenue.
NCI is a $300 million solution provider focusing primarily on IT infrastructure management and systems optimization in the federal market. Computech is a Bethesda, Md.-based solution provider with nearly 170 employees and $40 million in annual revenue. It focuses on agile software development, IT systems modernization, application management, agile operations, data strategy and analytics, and more.
Computech will be integrated into NCI as its own sector of the company, led by President Larry Fitzpatick, who will now be senior vice president and general manager. Computech founder and CEO J.D. Murphy Jr. will retire after the acquisition is complete Jan. 1.
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The acquisition is part of a strategic shift by NCI to branch out beyond its traditional customer base, President Brian Clark told CRN. Most of the Reston, Va.-based solution provider's customers are in the Department of Defense (DoD) and intelligence, with its biggest customer being the U.S. Army. By bringing Computech on board, NCI is stepping further toward a goal to diversify its customer base to include more civilian customers.
Computech brings 100 percent incremental new federal civilian customers. Some of those customers include the Federal Communications Commission, Department of Homeland Security, Executive Office of the President, Internal Revenue Service and more. The acquisition will go a long way toward NCI's goal to have 25 percent purely civilian customers, Clark said. Today, NCI does 75 percent of its business with the DoD, and the rest is mostly health-care IT.
"We have a strong desire to move the needle," Clark said. "We look at that as a very large and new market for us and one that we're investing heavily in as well," he continued.
The driving force behind diversifying is a goal to exceed $500 million in revenue by 2017. NCI expects to reach $315 million to $320 million in revenue by the end of this year. That will be achieved through organic growth, expanding the customer base and additional acquisitions, Clark said.
The acquisition also boosts NCI's technical capabilities, Clark said. With a focus on agile software application development, software development, app development and IT systems modernization, Clark said Computech will help NCI win contracts that are "higher on the food chain."
"These are all capabilities that come to us that add to our core capability offerings," Clark said.
A self-proclaimed "deal junkie," Clark said that he is "always on the hunt" for the next acquisition, though it has to be the right fit for the company. He expects the next NCI acquisition will be larger -- around $200 million in revenue -- and will add strategic value through more differentiators.
"I'm always on the hunt for the next deal, but it's got to be the right one ... We're going to be selective about getting the right things," Clark said.
PUBLISHED DEC. 30, 2014