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by Wayne Heilman, Colorado Springs Gazette, January 23, 2018 - Colorado Springs-based defense contractor Vectrus Inc. made its first acquisition Tuesday since it became a separate company in 2014.
Vectrus paid $36 million to buy Sentel Corp., an Alexandria, Va.-based military engineering, logistics management and intelligence support contractor with 600 employees.
Vectrus said in a news release that the deal advances its strategy to become a leader in "the converging physical and digital infrastructure market, enhances the company's logistics, IT (information technology) and technical solutions capabilities, while expanding the Vectrus client base."
Sentel generated $107 million in revenue during the fiscal year that ended Sept. 30 by developing software to manage electromagnetic spectrum, sensor networks, border and perimeter surveillance systems and other detection systems as well as global logistical support systems.
The company provides mission support to intelligence agencies and manages major facilities, supply chains and assets valued at more than $5 billion for clients that include the Army, Navy, Air Force, Federal Aviation Administration and Internal Revenue Service.
"Sentel expands our geographic footprint, capabilities and market positioning, and will accelerate the transition of Vectrus into a higher value, technology-enabled" company, Vectrus CEO Chuck Prow said in the release. The deal also "brings immediate access to important clients in the intelligence community. The company also expands our logistics capabilities and U.S. footprint with a key Vectrus client, the U.S. Army. Finally, Sentel significantly enhances our IT business with core competencies, such as engineering, sensor integration and management" and other detection systems.
Vectrus used cash and borrowings from a $120 million credit agreement it signed in November with JPMorgan Chase Bank. The agreement replaced and refinanced a $75 million agreement with the banking giant.
Sentel was founded in 1986 as an engineering company, supporting the U.S. government with electromagnetic capabilities and sensor integration, later expanding into logistics, information technology and other areas. Russell Wright, then CEO of information technology and aerospace management company Dimensions International Inc., bought Sentel in 2004. He sold a majority interest in Dimensions International three years later in a $230 million deal with Honeywell International Inc. but retained Sentel until hiring investment banker Houlihan Lokey to sell the company.
Vectrus will retain Sentel's employees, including its four vice presidents, at the company's current locations, including headquarters and offices in Maryland and Virginia.
Vectrus was spun off as a separate public company in 2014 by Exelis Inc., which was acquired the following year by defense giant Harris Corp. Vectrus generated $1.2 billion in revenue in 2016 and employs about 5,600 people at 143 locations in 18 countries.
Original article with multimedia here: http://gazette.com/colorado-springs-defense-contractor-vectrus-inc.-makes-first-acquisition/article/1619589
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