Larry Prior Joins the Carlyle Group; Firm Renews Federal Focus

      The Carlyle Group has signaled a renewed focus in the federal market by hiring Larry Prior, CSRA’s former president and chief executive officer, and a four-time Wash100 winner, as an operating executive in its aerospace, defense and government services team. The move comes two years after Carlyle soldtheir remaining stake in Booz Allen Hamilton, after taking the company public in 2010 following an approximately $2.6 billion acquisition. In 2015, the private equity firm bought Novetta for an undisclosed sum, boosting its cyber analytics portfolio.

Highlighting his optimistic outlook for the country, David Rubenstein, Carlyle’s co-founder and co-executive chairman, commented on Bloomberg TV yesterday, “We might be in the longest cycle ever of economic growth.”

      Carlyle said Prior will provide investment guidance on acquisition and sourcing, and give advice on growth strategies, operations and management. Prior commented he looked forward to offering expertise on consolidating the federal services market, as well as helping drive new value. Ian Fujiyama, a managing director within the A&D and government services group, expressed excitement at drawing on Prior’s experience.

      At CSRA, Prior spearheaded the company’s $9.7 billion acquisition by General Dynamics, which closed in April. Before that, as vice president and GM of Computer Sciences Corp.’s North American public sector business, he helped oversee the company’s 2015 merger with SRA International to form CSRA. Prior has also held senior leadership roles with BAE Systems, ManTech International, SAIC, TRW, LightPointe Communications and High Technology Solutions.

      Prior will join an established team assembled by Frank Finelli, a managing director overseeing U.S. national security investments, and a 2015 Wash100 winner. Before joining Carlyle, Finelli served as a legislative assistant to then-Senator Dan Coats, R-Ind. Currently the director of National Intelligence, Coats assumed office last year.

There are several key factors contributing to the significance of this announcement which should keep all eyes on Carlyle/Prior. They include:

• Smart money (i.e., Carlyle; Veritas) leaning into the GovCon market;

• A bias toward consolidation of large company M&A;

• An improving economy;

• The waning impact of sequestration;

• The new administration’s commitment toward funding DoD, space, DHS, Intel and IT technology projects;

• The availability of capital for investment;

• More emphasis on delivery of products and services than on regulations;

• The fact that LPTA has faded which should put upward pressure on margins;

• The fact that technologies like artificial intelligence, machine learning, hypersonics and astonishing new edge processing capabilities will accelerate the replacement of legacy systems;

• And the algorithmic race for superiority and exponential promise of quantum computing.