SI International [SINT] yesterday said that it has agreed to acquire veteran-owned Arrowpoint Corp., which provides information technology and professional services primarily to the Defense Department, for $16 million in cash plus the potential for another $9 million depending on performance.
The pending deal would expand SI International’s footprint with DoD customers. Arrowpoint provides various IT, program management, business process reengineering, personnel services, logistics and engineering and consulting services to the National Guard, Navy and Army.
Northern Virginia-based Arrowpoint had $17.3 million in sales last year and SI International expects the acquisition to be accretive to earnings. About 83 percent of Arrowpoint’s sales are as a prime contractor. The company has about 150 employees, 80 percent of whom hold security clearances.
SI International expects to pay the purchase price with existing cash and additional borrowings.
"The combination of Arrowpoint’s long-standing relationship with key DoD clients builds on SI International’s existing client base and enhances the core competencies that we bring to serve the growing needs of the Federal Government," Brad Antle, president and CEO of SI International, said in a statement. "With continued emphasis on providing leading information technology services to the National Guard, Navy and Army, Arrowpoint’s existing pipeline and positioning for new opportunities is expected to support our growth objectives going forward."
SI International must complete due diligence and obtain final approval from its board to close the deal.