by Calvin Biesecker, Defense Daily, January 26, 2018 - Vectrus, Inc. [VEC] last week said it has acquired U.S. government technology solutions provider SENTEL Corp. in a $36 million cash deal that strengthens its technology capabilities and expands its customer base, including with the intelligence community.
Vectrus, which was spun out of the former Exelis in 2014, provides infrastructure asset management, logistics and supply chain management, and information technology and network communication services to U.S. government customers globally. SENTEL, which is based in Northern Virginia, has core capabilities in logistics and supply chain management, engineering and advanced technology solutions, and intelligence mission support.
Vectrus had $1.2 billion in sales in 2016. In the third quarter of 2017, the company generated 83 percent of its revenue from the Army, 13 percent from the Air Force and 2 percent from the Navy. Overall, 78 percent of Vectrus' business comes from facility and logistics services, and the company said the acquisition positions it to be a leader in the converging physical and digital infrastructure market.
“SENTEL expands our geographic footprint, capabilities and market positioning, and will accelerate the transformation of Vectrus into a higher value, technology-enabled and differentiated platform,” Chuck Prow, president and CEO of Vectrus, said in a Jan. 23 statement. “In particular, SENTEL 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, surveillance systems, and various other detection systems.”
SENTEL has more than 600 employees and generated $107 million in sales in its most recent fiscal year, which ended on Sept. 30, 2017. More than 70 percent of SENTEL’s employees hold security clearances and have degrees in Physics, Match, Electrical Engineering, Mechanical Engineering and Computer Science.
In addition to the Army and intelligence community, SENTEL’s other key customers include the Navy, Air Force, Federal Aviation Administration, and Internal Revenue Service. The company also provides engineering support to Department of Homeland Security border security systems.
Vectrus expects the acquisition to be accretive to its earnings this year. SENTEL’s financial adviser on the deal was Houlihan Lokey, and Vectrus received strategic advisory services from Renaissance Strategic Advisors.
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