Chevy Chase-based private-equity firm Arlington Capital Partners is merging one of the companies it has invested in with a new acquisition to build a new “big data” contractor.
The deal brings together two local businesses, Tysons Corner-based White Oak Technologies, which Arlington Capital Partners bought a majority stake in in late 2010, and Reston-based FGM. Arlington Capital would not disclose the terms of the deal, but it will own a majority stake in the new entity and the rest of the company will be owned by White Oak and FGM’s founders and management.
Peter LaMontagne, a CACI International executive who has also worked at Paradigm Technologies and ManTech International, will head the merged company, which will be called Novetta Solutions.
The new company will maintain leadership from its predecessors; Alan Broder, White Oak’s chief executive, has been appointed chairman, while Scott Gessay, FGM’s chief executive, has been made president.
Both companies have expertise in large data sets and work with national security customers, LaMontagne said.
“The two companies have very similar cultures,” he added. “This is not one large company acquiring the other, but two complementary companies coming together to form something new.”
The merger comes as mid-size contractors gain clout within the industry. Though traditionally known as a difficult size — too big to receive special treatment reserved for small businesses and too small to have the scale and brand name of major contractors — the size has won more fans in a difficult federal spending environment. Analysts say these companies are typically more agile and don’t have the significant overhead costs of larger firms.
LaMontagne said he expects both White Oak and FGM to receive a boost from the merger.
“There’s no doubt that having a little bit more scale will ... give us a little bit more reach,” he said. “At the size that we are, we still have a long way to grow and still maintain that agility.”
Private-equity firms like Arlington Capital have taken an increased interest in contracting firms in recent years.
This deal is “private equity aggressively building a platform business,” said Bob Kipps, managing director of the McLean-based investment firm KippsDeSanto.