He departed to become chief executive from 2006 to early 2010 at Herndon-based GTSI, which was later suspended by the Small Business Administration in fall 2010.
The management-led investor acquisition returns Leto to the chief executive role and makes Ron Bohlin, a former McKinsey partner, chairman and chief strategy officer. Also part of the team is Bradley King, former chief executive of Serco’s North America business; Brian Hays, a former senior vice president at McLean-based Science Applications International Corp.; and Christopher Heath, Robbins-Gioia’s former chief information officer.
Capital Business recently interviewed Leto. What follows are edited excerpts from that conversation:
How did this acquisition happen?
This is my third time at the plate with Robbins-Gioia. The first time was in 2002, and in two years, we took profit from $2 million to $8 million and revenue from roughly about $55-to-$60 million to $80 million. Shortly after [IIR] acquired the company, I retired again, and they called me back, and we took profit in another two years from $8 million to $16 million. [After the Informa acquisition], they asked me to sign a three-year contract, and that was about the time when GTSI was almost on the verge of bankruptcy, and I was on the board of directors. The GTSI board asked me if I’d help GTSI out, and roughly three and a half, four years later at GTSI, we had record profits. When I turned 66, I retired from GTSI. Then this opportunity came up.
What lured you back?
The opportunity here is basically to reinvest earnings, whereas in the past — being owned by a British firm — most of the earnings got paid out in dividends. When you combine the absence of reinvested earnings with downsizing in the government and an insourcing program that hired a lot of R-G’s people and made them government employees, the company atrophied down to about $60 million [in revenue] in 2011 and about $6 million in profits. I have a third kick at the can, only this time I own the company. I’m a bit of a corporate mechanic. I get called in when companies get sick, and I go in to fix them for very little equity and big earnings. This time, I have small earnings with a lot of equity.
Will it be harder in this budget environment?
Every time a [business development] person comes to me and says, “My customer doesn’t have any money,” I always say, “Go find a new customer.” The federal government has a budget of almost $2 trillion. We’re $60 million, so we’re a rounding error in the government’s total budget. [The nation is] not downsizing the intelligence arena, we’re not downsizing cybersecurity and we’re certainly not downsizing health care, so those are major opportunities. We plan to rapidly expand our commercial business. We think the economy’s going to turn, and large corporations are going to have more and more money to invest in the kind of consulting we do.
Are you still involved with GTSI?
I don’t own any stock; I’m not on the board.
The suspension was after your time?
Yep, I won’t comment on any of it.