After the government contracting industry experienced a surge in mergers and acquisitions a few years ago, the market has cooled in recent times. This is partly due to cautionary business behaviors in response to accelerated inflation.
According to Howard Seeger, founder, managing partner and CEO of advisory firm Deep Water Point, in today’s landscape, the fit has to be exactly right. The benefits must far exceed just a passing curiosity in order to justify a larger company acquiring a smaller one. Luckily for Seeger and his organization, they located the right fit in an organization when they made public their decision to acquire Wolf Den Associates.
The deal (for an undisclosed amount) was announced on Nov. 21 but came after months, even years, of deliberation and careful planning, Seeger and Wolf Den Associates CEO Kimberly Pack told GovCon Wire in an exclusive interview.
“Both companies have been around for quite a while…a lot of folks thought that we were direct competitors. And it turns out that we were actually almost completely complementary,” Seeger shared.
The executive began his career with military service in the U.S. Navy and subsequently worked in GovCon itself for many years before establishing his own practice advising contractors. He said that he and Wolf Den Co-Founder and previous Wash100 Award winner Kevin Robbins began to feel that the two companies’ united strengths would be a value-add for both parties, as well as for their clients.
Once Deep Water’s controlling chair was purchased by private equity firm Renovus Capital Partners in Dec. 2021, they were in a renewed position to take a serious look at partnering with Wolf Den on a permanent basis.
“The synergies between the two companies truly do enable us to scale and build better depth and breadth across what we do and across the full federal market, the federal landscape and the growth lifecycle,” Pack stated.
Pack also said the expertise offered by the 343 professionals employed by Deep Water Point were an aspect of what made the deal such an energizing prospect. Many of those team members come from a background in government and the federal sector and are specialists in their field. In joining Wolf Den’s seasoned staff of 46, they can offer the firms’ combined customer base a unique perspective, or a “360-view across the whole federal landscape,” per Pack.
With their compounded resources and skill sets — which Seeger calls “a more complete set of offerings” — Deep Water Point and Wolf Den also intend to mount a growth strategy that encompasses both organic and inorganic growth, which was previously not possible as separate entities. Pack noted that from an advisory angle, the deal strengthens the firms’ ability to help GovCon companies “make sure that they become that fierce competitor that they need to be in this market to win.” She said she sees their utility as “the arms, the legs, the hands, the brains that [contractors] just can’t keep on staff because it costs too much.”
Over the next few months, Seeger, Pack and their teams are working to transition into the new ownership structure as seamlessly as possible while still being mindful of all of the necessary components and moving parts.
“We’ve reorganized and created a look that if you were to color the Wolf Den boxes a certain color and the Deep Water Point boxes a different color, you’re going to see a fully integrated team with colors from both of those in the key leadership roles,” Seeger described.
To do so, the teams have brought in a neutral mediator—a third party firm to help handle all negotiations and integration concerns. Seeger and Pack say doing this ensures that the process is even-handed, “unemotional” and mutually beneficial. For now, the acquired company is billing itself as Wolf Den Associates: A Deep Water Point Company.
Sometime in the next month or two, when the time is right, the executive leadership team is going to convene to finally decide what the new entity will be called and how all of the pieces fit together on a structural level.
In terms of where the executives see their business in five years, Pack predicted, “We will still be solving hard and complex problems for a variety of customers…and continue to be brought in for those hard and complex problems that they’re trying to face and really work through. Growth will come from that and scalability will happen because of that.”