News Article

Colorado Springs' largest defense contractor announces merger
Date: Aug 09, 2021
Author: Wayne Heilman
Source: ( click here to go to the source)

Featured firm in this article: EOIR Technologies Inc of Fredericksburg, VA

Intelligent Software Solutions, the largest defense contractor based in Colorado Springs, is merging with Maryland-based Proteus Technologies and Virginia-based EOIR Technologies in a three-way deal financed by a Washington, D.C., area private equity firm.

The merged company, Polaris Alpha, will operate headquarters in Colorado Springs and Fredericksburg, Va., and is headed by EOIR Technologies CEO Pete Cannito as CEO and ISS CEO Jay Jesse as president, said David Wodlinger, a partner with Arlington Capital Partners. The combined company will retain its more than 1,100 employees and expects to generate more than $250 million in revenue next year by selling technology, software and solutions to the defense and intelligence agency customers, according to a news release issued Monday.

"We are bringing these three companies together to create a growth platform. We expect to hire additional folks and technology folks, 100-200 employees a year across all of our locations. The challenge is finding the talent to hire," Wodlinger said. "This company could easily double in size within five years. We also will be looking for additional like-minded technology companies to bring into the mix. We are excited about the future. This is a rare opportunity to bring three high-tech companies with quality, elite employees with a strong skillset."

ISS specializes in information technology for military customers and employs more than 300 in Colorado Springs and 250 at offices in Hampton, Va.; Rome, N.Y.; Tampa, Fla.; Washington, D.C., and London. EOIR specializes in senior design and development, intelligence support and analysis, rapid prototyping, training and simulation, mission command and field service support and employs more than 400 at 11 offices in Alabama, Maryland, New Jersey, Ohio and Virginia, while Proteus specializes in cybersecurity and employs more than 100 at offices in Annapolis Junction and Columbia, Md.

"Polaris will fill the void between niche players and prime contractors to deliver agile, sophisticated solutions to a growing number of government customers disillusioned with the traditional options available to them," said Michael Lustbader, an Arlington Capital managing partner. "Polaris is a byproduct of the infusion of innovation into the national security sector and is contractually well-positioned to capitalize on this market opportunity."

Jesse said ISS has been looking for outside investment for internal growth and acquisitions for two years and began discussions with Arlington during the early stages of that search. The company has landed more than $100 million in contracts this year and filled 75 positions since January but still has 40-50 openings, he said.

"For our sector, Arlington is a real leader and we expect a lot of work to flow into here (Colorado Springs), which will be one of the two headquarters sites," Jesse said. "The combination of our technologies and subject matter expertise will significantly enhance our ability to deliver unique, impactful solutions to customers with some of the most important national security missions."

Arlington has been working with ISS for two years and Proteus since 2012, but was looking for "the right time and opportunity" to acquire the companies when "everything came together nicely" with the acquisition of EOIR in June, Wodlinger said. "Polaris has invested heavily in its core technologies and has had tremendous success transitioning its R&D (research and development) efforts to full-scale operations. The company's ability to develop and operationalize technology will be significantly amplified by the combined scale of the new entity."

Arlington was started in 1999 and invested $2.2 billion in nearly two dozen companies in the technology, aerospace and defense, health care services and business services and software industries, including 10 companies in the defense and aerospace sector. The company has a "buy and build" acquisition strategy of seeking companies with $50 million-$500 million in annual revenue, complementary capabilities that give its portfolio companies an opportunity to sell to each other's customers, potential to grow internally and through acquisitions and consolidation in fragmented industries.

ISS was started in 1997 by Jesse and three co-founders, all but one of which worked at GTE Government Systems, that grew rapidly and made the Inc. magazine 5000 fastest-growing companies list nine times in 10 years, in 2004-13.

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