ManTech International [MANT] on Friday said it has agreed to acquire the federal business of staffing and solutions provider Kforce Inc.
[KFRC] for $115 million in cash, expanding its presence in the federal civilian information technology and health space.
ManTech said that Kforce Government Solutions (KGS) had about $98 million in sales last year and profitability comparable to its own. ManTech expects the acquisition to be slightly accretive to earnings this year.
It had nearly $2 billion in sales last year and net income of $82.1 million with operating margin of 5.8 percent.
A ManTech spokesman told Defense Daily that KGS complements ManTech’s capabilities, mainly in the areas of software development, data analytics and healthcare information technology.
The Department of Veterans Affairs is a key customer of KGS and will significantly expand ManTech’s footprint there and enable it to deliver services through the department’s IT contract vehicle, the Transformation Twenty-One Total Technology Next Generation (T4NG) program. The 10-year multiple award TN4G contract runs through March 2026 and has a ceiling value of $22.3 billion.
The spokesman said that the VA has budget growth of 9 percent and growth in its IT budget of 3 percent.
Other key customers of KGS include the Defense Threat Reduction Agency and the Air Force. KGS has more than 500 employees.
“This acquisition is consistent with ManTech’s targeted federal civilian expansion strategy,” Kevin Phillips, president and CEO of ManTech, said in a statement.
Maureen Coyle, CEO of KGS, said that becoming part of ManTech “will help us better meet our clients’ needs by broadening and deepening our solution offerings.”
The acquisition requires regulatory approval and is expected to be completed this month. Kforce’s financial adviser on the deal is KippsDeSanto & Co. ManTech didn’t use a financial adviser.