Vangent says it will acquire IT firm, reports wider loss
Seeking to boost its government health-care services offerings, Arlington-based Vangent announced last week it will acquire a Warrenton firm that provides information-technology services as well as data hosting and analytics.
Vangent will pay $65 million for Buccaneer Computer Systems and Service, a 450-employee firm.
Mac Curtis, Vangent's president and chief executive, said in a conference call with investors last week that the acquisition is expected to close by the end of September.
"Buccaneer is well known and well respected by its government customers" in the Food and Drug Administration, the Centers for Medicare and Medicaid Services and the Defense Department, "agencies where Vangent has experience," Curtis said. "The acquisition of Buccaneer will further strengthen our ability to serve government customers."
Jim Reagan, Vangent's senior vice president and chief financial officer, said in the same call that the company will fund the acquisition using a mix of cash and a drawdown on the company's credit facility, which it expects to repay by the end of the year.
"The timing is especially good as we see a number of key business opportunities in the third and fourth quarters of this year," Reagan said of the purchase.
Vangent -- whose past work included processing many of the vouchers used in the federal "Cash for Clunkers" car-buying incentive program -- first increased its focus on health care about seven years ago. The company has significantly expanded its health sector and has sought to position itself for an anticipated surge of federal spending on health information technology.
Meanwhile, Vangent reported last week that it lost $8.1 million in the second quarter, nearly 33 percent more than in the same quarter last year.
Vangent said the loss reflected a charge related to its past decision to sell its business operations in Latin America.
The company's revenue for the quarter grew 59 percent -- from $135 million in the second quarter of 2009 to nearly $215 million this quarter.
Vangent attributed the growth to its government unit, which took in almost $86 million in revenue through work on the 2010 U.S. Census. Contracts with the Education and State departments also helped the company boost its revenue.
Its human capital group posted a decline in revenue after the company completed an Air Force contract, according to Vangent.