Sirius to Buy $260 Million Federal Network Security Powerhouse Force 3

Sirius Computer Solutions tapped into its new private equity backing to purchase a 170-employee U.S. government solution provider dedicated to next-generation network security technology.

The San Antonio-based company, No. 28 on the CRN 2015 Solution Provider 500, said its acquisition of $260 million Force 3, Crofton, Md., will enable Sirius to better serve customers in the Mid-Atlantic region and tap into additional contact vehicles for public sector clients.

Terms of the deal, which is scheduled to close March 31, were not disclosed. Force 3, No. 79 on the CRN SP 500, will continue to operate as a separate legal entity and maintain the Force 3 name, with Mike Greaney staying on as CEO.

[Related: Sirius On The Prowl For Acquisitions As Kelso Preps To Buy Majority Stake]

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Sirius had been looking to expand into the federal space for the past two years, but found many players in the space were focused more on pure product fulfillment rather than a technically driven sales model, CEO Joe Mertens told CRN. Mertens said Sirius' OEMs praised Force 3's technical skills and encouraged the solution provider to move forward in the federal space with the company.

Marrying Sirius' expertise in the data center -- particularly around server and storage infrastructure -- with Force 3's mastery of the networking and security spaces will enable the combined company to deliver stronger end-to-end solutions to clients, according to the companies.

"When you put those two together, boy, that can be really impactful," Greaney told CRN.

Force 3 has also deployed its top-notch engineering talent to build a practice around software-defined networking and continue to invest in secure collaboration, secure wireless and secure data center solutions, according to Greaney.

Force 3 does 95 percent of its business with the U.S. government, and is a prime contract holder on the GSA Schedule 70, NETCENTS-2 (Air Force), SEWP V (civilian agencies), NIH ECS III, CIO-CS and the ITES-3H (Army) vehicles.

"Unless we have the contract vehicles to do that, it becomes very difficult," said Mertens, adding that Force 3 also has a top secret facility clearance.

Force 3 also has the only dedicated support service offering in the federal market, which Greaney said is focused on white-labeled solutions in the Cisco ecosystem spanning the entire technology life cycle. Given Force 3's identity and track record in the federal space, Greaney said both companies felt it was best to retain the Force 3 brand and commercial practice.

Sirius believes Force 3's existing core networking and security business is solid, Mertens said, but would like to broaden the base by extending Sirius' IBM and software solutions to Force 3's existing clients. Greaney expects Sirius' managed services and "as-a-service" offerings to also be appealing to Force 3's customer base.

As IBM's largest global solution provider, Sirius will enable Force 3 to sell Big Blue into the federal space in a meaningful way for the first time. Becoming part of Sirius will also make it easier for Force 3 to serve federal customers outside the Washington, D.C., area, Greaney said.

The two companies also share many vendor partners, including Cisco, Citrix, Dell, EMC, NetApp, Palo Alto, Splunk and VMware.

Sirius has more than 5,000 active clients and roughly 1,700 employees with more than 4,000 professional and technical certifications. The company was sold in September by Thoma Bravo to private equity giant Kelso & Co., and Mertens told CRN at the time that Kelso's investment would make it possible for Sirius to be more aggressive in acquiring firms with networking and services expertise.

Kelso was very involved in the Force 3 deal and provided Sirius with a great deal of help throughout the acquisition process, Mertens said. Sirius will continue to look for M&A opportunities to broaden its market base and skill sets, Mertens said, but will also devote energy to maximizing revenue growth at Force 3.

Force 3 has been held privately by Greaney and two other shareholders.