Kforce, Inc., this week said it has acquired government information technology (IT) services provider dNovus RDI for $38 million in cash in a deal designed to expand Kforce’s customer base as a prime contractor in the federal space.
Texas-based dNovus, which had $32 million in sales for the 12 months ended in September, does large network design, implementation, operations and maintenance, cyber security, software and database design and development, health care informatics, data center operations, EDI operations for health and financial services, and more. The company’s primary customers include the Department of Veterans Affairs and Commerce, the Air Force and Army.
“We believe this combination will enable Kforce’s Government Solutions segment to well exceed $100 million in annual revenues in 2009,” David Dunkel, Kforce’s chairman and CEO, said in a statement. He said that Kforce is “fully committed to becoming a significant player in the government sector.”
Kforce, which is based in Tampa, Fla., provides professional staffing services for commercial and government organizations in the areas of technology, finance and accounting, and health and life sciences.
Houlihan Lokey, which served as dNovus’ financial adviser on the deal, said the acquisition is indicative of broader industry merger and acquisition trends, including diverse buyer interest for government services companies, health IT is a “priority market” for buyers, and growing demand for companies with military network operations and information assurance qualifications.
Kforce said that it expects to realize an $8 million future cash tax benefit because classifying the transaction as an asset sale. dNovus has 250 employees.