On Assignment spends nearly $1B for private-owned government services contractor
On Assignment Inc. (NYSE: ASGN) has agreed to spend $775 million in cash for ECS Federal LLC, one of the largest privately-held government services contractors. The Fairfax, Virginia-based target is being acquired from majority owner Roy Kapani and private investment firmLindsay Goldberg.
Founded in 2001, ECS is a full service technology and engineering management consulting company. The firm provides the U.S. federal government with a variety of technology services, including: acquisition management, analytical program planning, integrated warfare systems, and financial management support systems. The transaction for ECS is expected to close on April 2.
Together, ECS and On Assignment will be one of the largest IT professional service firms in North America providing cybersecurity, cloud, development operations, information technology modernization, advanced science, and engineering services to government entities. Calabasas, California-based On Assignment operates of network of 150 branch offices across the U.S., Canada and Europe. The buyer plans to change its name to ASGN Inc. following the close of the deal.
“ECS’ government services solutions will complement and elevate our offerings and strengthen our position as a premium IT and professional services provider,” states On Assignment CEO Peter Dameris. ”Our addressable end market is now $279 billion by virtue of our entering the $129 billion Government Services space. ECS’ long-term contracts, which average 5 years in length, and robust backlog ($1.6 billion) provide strong revenue visibility and mitigate volatility from permanent placement revenue and a more challenging economic environment.”
Other middle market deals involving service providers to municipalities and government entities, includes: HIG Capital’s acquisition of government data analytics provider NCI; Veritas Capital’s buying of Harris Corp.’s government IT business; and Itron Inc.’s purchase of Silver Spring Networks Inc., a smart grid and utility products manufacturer used or power city generators.