Fairfax Companies Busy Buying and Growing

Several Fairfax County companies have grown this week by acquiring smaller companies all over the country, highlighting the robust merger and acquisition market in Northern Virginia.

Three of the county's largest employers are among the buyers. Northrop Grumman Corp. announced it had signed an agreement to pay approximately $580 million for Maryland's Essex Corp., a Columbia-based provider of signal processing services and imaging for intelligence and defense agencies.

Science Applications International Corp. agreed to acquire Applied Marine Technology Inc., a Virginia Beach systems integrator for the intelligence and military communities. SAIC will gain 500 employees through the deal.

And AOL LLC announced its purchase of the Relegence Corp., a financial news and information search technology company based in New York. The company, which has 60 employees, will operate as a subsidiary of AOL. The acquisition will boost efforts to develop online publishing tools by offering more real-time features, AOL said in a news release. Relegence is AOL's fifth acquisition this year.

A few smaller local companies have also been busy shoppers. Reston-based Helios HR LLC, which provides human resources consulting, acquired its competitor, Talent Advantage. The new company will be one of the largest human resources outsourcing and consulting firms in the Washington area.

Herndon-based IceWEB Inc., a software and network security company, bought the federal government business operations of True North Solutions Inc., a subsidiary of American Systems Corp. In addition to acquiring the company's profitable government business unit (it had more than $28 million in federal sales last year), IceWEB said it will benefit from valuable vendor relationships with companies such as Citrix Systems Inc. and Secure Computing Corp.

Reston-based Altum Inc. bought Easygrants, a grant-making software that was previously owned by the Arlington Group. Altum provides software products to philanthropic and government organizations.

Low interest rates and high amounts of private equity have been driving a large number of acquisitions, especially in the government contracting market, said Frank Walker, who specializes in mergers and acquisitions for Beers & Cutler, a McLean accounting and consulting firm.

"Companies are seeing high profits these days, and they're looking for places to invest," he said. "Companies are buying others that extend their reach to customers."

Venture Companies Close Funds

---

It's a lucrative time for technology start-ups in the area as venture capital firms step up their investment resources.

Vienna-based Valhalla Partners this week announced the closing of its second fund, worth $260 million, bringing its total capital to more than $440 million. The fund will be used to expand the company's portfolio of Internet, digital media, software, mobile and storage-based businesses.

Earlier this month, NovakBiddle Venture Partners closed its fifth fund, worth $227 million, bringing the total capital under management to $580 million. The Bethesda company has invested in several Northern Virginia firms, including Command Information and ObjectVideo, focusing on early stage technology companies.