PEC Solutions Acquires AC Technologies

Defense Daily, Sept 13, 2004

Professional services firm PEC Solutions, Inc. [PECS] last week said it has acquired federal information technology (IT) provider AC Technologies (ACT) for $46.7 million in cash.

ACT, based in Fairfax, Va., specializes in software engineering and networking services, and is certified at Level 3 on the Capability Maturity Model. The company does about 10 percent of its business with DoD, including the Army and Air Force, and its largest customer is the Postal Service.

ACT had about $48.5 million in sales for the last 12 months and earnings before interest, taxes, depreciation and amortization of about $7.4 million. PEC expects the deal to be immediately accretive to earnings.

Both companies have similar capabilities but ACT gives PEC access to some new agencies and also to other customers in agencies where PEC currently has business, a PEC spokeswoman told Defense Daily. Other ACT customers include the Veterans Health Administration and the National Institutes of Health. ACT has over 360 employees.

The payment provisions also include an additional $3 million for employee retention bonuses and earnouts. Also, PEC said that $16 million of the cash would go toward retiring ACT's debt. PEC is treating the transaction as an asset purchase, which will give it tax benefits over 15 years of about $12 million. PEC is also based in Fairfax.

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