ICF (Nasdaq: ICFI) has agreed to acquire Arlington, Va.-based Incentive Technology Group for approximately $255M as part of efforts to expand information technology modernization support services to U.S. federal agencies.
ICF said Monday it expects the transaction to close in the first quarter of 2020, subject to regulatory approval and other customary closing conditions.
Established in 2010, ITG is an IT modernization and consulting firm that provides cloud-based platform services, enterprise architecture, business process engineering, Agile systems engineering and other digital services to federal agencies. The company recorded approximately $90M in 2019 revenues and closed the year with a revenue run-rate in excess of $100M.
“This transaction is aligned with our strategy to complement organic growth with acquisitions that strengthen ICF’s position in key growth areas,” said John Wasson, president and CEO of ICF. “IT modernization and cloud together is estimated to be approximately a $21 billion federal market and one in which ICF already has gained traction through organic expansion.”
Wasson added the transaction allows ICF to see revenue synergies through the combination of its contract vehicles and business development platform with ITG’s technology partnerships, platform expertise and performance track record.
“The leadership and incredible talent at ITG is what really sets them apart. There was an immediate connection and shared vision of what was possible together, that both teams really rallied around,” Eric Hamann, senior vice president of corporate development at ICF, told GovCon Wire. “We could not be more excited to partner with the ITG team to have meaningful and positive impacts on agency missions through the deployment of best-in-class technologies and look forward to helping advance the IT modernization agenda government-wide.”
ICF said it expects the net present value of the deal’s tax benefit to be about $33M and forecasts revenue to jump by approximately 10 percent from approximately $1.48B in 2019. The company will use its existing credit facility to fund the acquisition.
PwC and DLA Piper advised ICF on the transaction.