You may have noticed Sev1Tech’s recent M&A fueled evolution in utilizing funding from private equity owners. This blog provides a short overview into the Sev1Tech’s latest key hires, acquisitions, and new customer footprint.
Founded in 2010, Sev1Tech began as a data center consolidation and relocation consulting firm. The business has greatly expanded its offering to include providing enterprise IT, cyber security, cloud services, engineering, C5ISR, fielding, training, and program support services across the defense, intelligence, homeland security, health, and space markets. Headquartered in the Woodbridge, VA, Sev1Tech consists of over 800 employees, according to LinkedIn.
Sev1Tech’s growth has been partially enabled through two private equity owners – DFW Capital and Enlightenment Capital. DFW Capital acquired Sev1Tech in 2019. Enlightenment Capital joined DFW Capital in ownership shortly thereafter. This is yet another example of private equity investments in the U.S. Government contracting market. Such investments have enabled small to mid-tier contractors to enjoy explosive growth to compete.
Changes in leadership positions
As Sev1Tech changes and expands its business, they have been aggressive in making key hires. Below is a sample of some hires that align well with Sev1Tech’s likely future plans.
- Dr. Tim Hays, Vice President, Health IT and Civilian Solutions – Hired in February 2021, Tim Hays is a strategic hire to enable more data science and analytics offerings to be developed and bid for Sev1Tech.
- Neil Kronimus, Director of Cloud Solutions – Hired in March 2021, Neil has deep expertise in cloud computing and solutions design. He worked and major systems integrators such as CACI and GDIT. He also worked alongside Yogesh Khanna who was also CTO for GDIT and started at Sev1Tech in 2020.
- Michael Bosco, Senior Vice President, Army Mission Solutions – Hired in April 2021, Mike Bosco is a retired Sergeant Major from the U.S. Army who leads their C5ISR business. This is a major part of the Sev1Tech portfolio largely through the acquisition of ESP.
- Patrick Fitzgerald, Senior Vice President, Navy Missions – Hired in November 2021, Patrick is recently a Department Head for Enterprise Systems at Naval Information Warfare Center Atlantic.
Recent M&A History
Over the past two years, Sev1Tech’s has made two notable acquisitions, expanding their customer portfolios and capability offerings.
In October 2021, the company completed the acquisition of Geocent, with the intention to expand their capabilities in DevSecOps and the scientific space domain, complementing the company’s interest in space modernization work. The acquisition additionally aims to complement Sev1Tech’s base of work in DHS.
In September 2019, Sev1Tech acquired Engineering Solutions and Products (ESP), which supported the Army across logistics and supply chain management, systems engineering and integration, training and readiness, mission and program support, cybersecurity and other IT areas. This acquisition aimed to expand Sev1Tech’s footprint in C4ISR, build up its enterprise IT capabilities, and provide a wider range of IT modernization services to the Departments of Defense and Homeland Security.
Noteworthy federal customers
Figure 1 – Sev1Tech’s top five federal prime customers (including all acquisitions) from FY2017-FY2021
Source: SAM.gov
Figure 1 illustrates the prime contract customer base with the acquisition of Geocent and ESP added into Sev1Tech. Due to acquisitions, Sev1Tech has a robust portfolio of contracts across the U.S. Department of Homeland Security and the U.S. Army. The bulk of the company’s Army work falls under their RS3 IDIQ, gained through ESP, detailed below. Through the Geocent acquisition, the company gained a notable new footprint in the Navy customer. Via this acquisition, Sev1Tech also gained key subcontracting work for NASA, which could pose an opportunity for Sev1Tech to gain entry into the NASA market.
Sample of federal contracts
- U.S. Department of the Army, Responsive Strategic Sourcing for Services (RS3) Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) IDIQ – In May 2017, Sev1Tech (via legacy ESP) was awarded a 10-year, $37 billion shared ceiling value contract to provide C4ISR support services to the Army. Thus far, Sev1Tech has been awarded five task orders totaling $184 million in contract obligations. Under these task orders, Sev1Tech provides fielding and product support, systems engineering technical assistance (SETA) for tactical radios and Distributed Common Ground System-Army (DCGS-A) training and field services.
- U.S. Department of Homeland Security, United States Citizenship and Immigration Services (USCIS), Office of Information Technology (OIT), Risk and Fraud DevSecOps Services (RFDS) Contract – In March 2019, Sev1Tech (via legacy Geocent) was awarded a three-year, $73 million ceiling value contract to provide software development services for USCIS IT systems in USCIS Federal Cloud Data Centers. Geocent utilizes its DevSecOps capabilities to modernize fraud detection and case management systems.
- U.S. Department of the Navy, Naval Information Warfare Center (NIWC) Pacific, C4ISR Integration and Engineering Contract – In February 2020, Sev1Tech (via legacy Geocent) was awarded a potential eight-year, $249 million ceiling value IDIQ by NIWC Pacific to install integrated C4ISR systems and supporting systems primarily at the U.S. Navy’s San Diego installation. Geocent has been awarded $13 million in obligations thus far.
- U.S. Department of Health and Human Services, Office of the Chief Information Officer (OCIO), Next Generation IT Services Application Hosting Task Order–In October 2017, Sev1Tech was awarded a five-year, $38 million ceiling value task order on their Next Generation IT Services Application Hosting BPA to provide for the provisioning, engineering, operations and administration of current and emerging application hosting services. Sev1Tech provides data center environmental services, application migration, base server administration activities, managed security services, 24×7 monitoring of hardware, incidents, outages, and issues, etc. The company has received $36 million in contract obligations thus far.
The FedSavvy Strategies Takeaway
- Sev1Tech’s two significant acquisitions of Geocent and ESP have both diversified customers and more than doubled prime contract value in less than five years.
- Geocent is a recent acquisition which may further alter the organization of Sev1Tech as integration occurs.
- Private equity continues to make investments in smaller and mid-tier businesses in the U.S. Government contracting market to transform businesses…likely for later sale to larger buyers.
- Through acquisition, Sev1Tech has expanded its more traditional DHS customer base into a dual DoD and federal civilian agency customer set.
- Technical capabilities have also expanded significantly in areas such as mission IT systems, depth in supporting C4ISR, and applications development.
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