MSP Saalex Acquires Spalding To Expand IT, Software Expertise In Defense Sector
‘We really liked [Spalding’s] focus on the Naval Warfare Center, and what they do with their aircraft division. And we like Spalding’s software prowess and technology prowess,’ says Saalex Chairman and CEO Travis Mack.
Federal services contractor Saalex this week unveiled the acquisition of Spalding Consulting as a way to expand its IT and software reach into its primary market, that of the various agencies of the U.S. Depart of Defense.
Saalex, which is a service-disabled veteran-owned MSP, provides DOD support to Army, Navy, and Air Force components in the areas of information technology, security, engineering, engineering services, and logistics, and this year is celebrating its 25th anniversary, said Travis Mack, chairman and CEO of the Camarillo, Calif.-based solution provider.
Saalex has grown in part to a series of acquisitions, including the April 2020 acquisition of Valeo Networks. The company in August of that year renamed its IT division as Valeo Networks. The company does not have private equity backing, Mack told CRN.
Spalding Consulting is a software development-focused organization and a mainstay over in the Pax River, or Patuxent River, area of Maryland, Mack said.
“We really liked its focus on the Naval Warfare Center, and what they do with their aircraft division,” he said. “And we like Spalding’s software prowess and technology prowess. They are really an upcoming small business that has done exceedingly well in that area. And so coupled with our business on the West Coast, we thought that Spalding would be a great addition to expand our capabilities in the software development arena.”
Spalding brings Saalex a more robust software development capability and a more robust information technology support capability, said Mack (pictured above).
“They also bring us access to another department that we currently didn't have access to in the federal environment, the Naval Air Warfare Center Aircraft Division (NAWCAD),” he said. “Together, they really expand and augment our capabilities in areas where we were a little bit lacking.”
Saalex found an acquisition opportunity in Spalding thanks to its very active corporate development organization, Mack said.
“We are looking for opportunities to acquire middle market firms that have done exceedingly well that we can roll into our ultimate business strategy,” he said. “And so we are always looking for organizations that might bring us additional capabilities, additional revenue, or access to agencies that we're currently not in.”
With the acquisition of Spalding Consulting, Saalex now exceeds $175 million in annual revenue, and has just over 1,200 employees nationwide. Spalding alone had annual revenue of over $75 million, Mack said.
Given the world’s geopolitical hotspots and economic issues, the Department of Defense remains an area where the Federal government continues to invest, Mack said.
“ We have to have a very strong military capability in order to not only protect our shores and our borders, but also our allies,” he said. “And so I will tell you that the DoD budget continues to increase year over year in order to support some of those initiatives far and wide.”
One area of interest that is growing in the DoD is AI, Mack said.
“Not only are we trying to help the federal government identify how AI can be more of a benefit to their business model, we're certainly utilizing it internally with some of our business systems as well to help us be more efficient and utilize data to our advantage and be able to make better decisions,” he said. “AI is the future. And we are trying to figure out the best model and the best way to use it.”
Looking ahead at 2024, Saalex plans to focus on identifying additional middle market federal contractors that might round out or enhance its portfolio, Mack said. The company is also focused on how to be more efficient with regards to bids and proposals as it looks to innovate how it goes after new business, he said.
“The message is really understanding our customers,” he said. “We need to anticipate those needs, and address those needs as efficiently as we possibly can. So it's about listening. It's about looking at what they're struggling with, and trying to provide recommendations and solutions to those challenges. And that's the best way for us to be ahead of the curve.”