ASGN Inc. [ASGN] on Monday said it has acquired the federal division of Blackstone Technology Group for $85 million in cash, expanding its presence in the government information technology and professional services market.
Blackstone Federal, which has about 100 employees and generated $44 million in sales in 2019, will become part of ASGN’s ECS segment. Blackstone Federal’s sales are expected to grow over 10 percent this year and generate operating margins in the mid-teens, ASGN said.
The Department of Homeland Security is one of Blackstone Federal’s key customers, and its contracts include the Architecture, Development, and Platform Technical Services Blanket Purchase Agreement. The business unit has capabilities in agile development, cloud modernization and systems architecture, cyber security, user experience design, and branding services.
“Blackstone Federal’s talented team and solution offerings are an excellent addition to our rapidly growing ECS segment, which is focused on large and complex IT solutions across key and attractive federal government customers,” Ted Hanson, ASGN’s president and CEO, said in a statement. “This acquisition fits perfectly with ASGN’s hybrid growth and capital allocation strategy, to scale ECS to over $1 billion in revenue through a combination of strong organic growth and complementary acquisitions in strategic technologies, capabilities, customers, and contract areas that together will enable us to even further enhance the solutions we provide to our customers.”
The ECS segment had $642 million in sales in 2018 while ASGN had $3.4 billion in overall sales that year.
ASGN, which is based in California and provides services to commercial and government clients, said it is granting restricted stock unit awards to seven Blackstone Federal employees subject to their continued service.
DC Advisory was Blackstone Technology’s financial adviser on the deal. Blackstone Federal is based in Northern Virginia.