Applied Signal Technology, Inc. [APSG] has acquired Seismic LLC, a small cyber security solutions provider serving the Defense Department and intelligence community, in a deal that it believes puts it in the top 10 firms providing network security in the intelligence arena. AST paid $25 million for Maryland-based Seismic, and the deal includes a $5 million earn-out provision. Seismic, which has about 100 employees, had $15 million in sales last year and is expecting to grow between 20 and 30 percent this year. “We believe that the current urgent need for cyber intelligence services will continue to expand into the future,” says William Van Vleet, AST’s CEO. “The acquisition of Seismic, a fast growing, profitable, and extremely talented organization, cements our position in that exciting market. We now have the scale, thought leadership, and access to resources to be a significant competitor across a wide range of programs.” Van Vleet, in a conference call with analysts, says that with Seismic, “The total of our network intelligence business is probably around 220 people, and we believe that vaults us literally into the top 10 of the contractors, so this is a significant move. It moves us to that first tier.” He also says that combined with AST’s existing work, the deal positions it on six of the seven key cyber security contracts that have been let over the past two to three years. Market forecasts put spending on cyber security at about $50 billion over the next five years, he adds.
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