FARMINGTON, CONN. -- Why is a large Connecticut conglomerate, heretofore best known for making locks, rivets, screws and shoe-making machinery, acquiring companies around Washington's Capital Beltway?

The operative word is diversification.

Emhart Corp. is moving aggressively into the lucrative federal contracting arena by snatching up two of Northern Virginia's better-known high-technology professional services companies.

Tomorrow, Emhart will complete its purchase of Advanced Technology Inc. in Reston. The acquisition comes only a year after the $2.4 billion Fortune 500 company took over Planning Research Corp. of McLean. The two acquisitions have transformed Emhart from a little-known quantity in the Washington business community into a major player.

It's all part of the master plan of Emhart Chairman Peter L. Scott, who was brought in 24 months ago to shake up the prosperous but sleepy Farmington machinery and industrial products company, which has 30,000 employes in 24 countries.

Scott's vision is to expand beyond the company's basic consumer and industrial products base into technology and service businesses, as epitomized by the acquisitions of PRC and Advanced Technology.

When Scott, 60, took over Emhart, the company was not in immediate distress. Earnings growth had been about 8 percent annually for a decade. But the company's revenue growth had been anemic, barely keeping pace with the growth of the economy.

And in 1985, the company was whacked by the depressed electronics and machine-tool industries, and by import competition in the footwear industry.

Emhart's board feared that the company's mature businesses faced an even rockier road of slow growth and cyclical or declining profits in the 1990s.

Scott was given a free hand by Emhart's directors, who told him to turn the company from a jogger into a high-growth sprinter. A former executive at United Technologies Corp., Dresser Industries and NCR Corp. who also founded a high-tech venture capital firm and two electronics companies, Scott took Emhart in the direction that was most natural to him.

He concluded that technology was key to the transformation of the company.

As he bluntly told manufacturing executives in a speech last year, Scott believes that American manufacturers are facing problems not because of unfair trade practices or taxes or inflation or Japan Inc., but because of industry's "myopia about technology ... our fear of taking intelligent risks ... of diversifying."

PRC was the first firm to catch Scott's eye, in part because Scott had been on the PRC board since 1983. Last December, Emhart purchased PRC for $220 million.

PRC, which has 7,000 employes, provides computer-based information management systems and other technical services, mainly to the federal government.

PRC's projects include designing and installing systems for the U.S. Strategic Air Command to assess security threats, operating missile monitoring equipment at Kwajalein Missile Range in the western Pacific, and automating the U.S. Patent and Trademark Office.

PRC's revenue is expected to be about $500 million next year.

Emhart paid an estimated $140 million for Advanced Technology, which has 2,257 employes and expects $200 million in revenue next year.

Advanced Technology has been heavily involved in Navy contracts, including communications and radar projects. The company also does research and development projects for the Strategic Defense Initiative and has a contract to consolidate the Army's personnel information systems.

With PRC and Advanced Technology as the key parts in the company's fast-growing information and electronic systems segment, Scott has ambitious goals for Emhart.

His strategy includes a revenue growth rate of 15 percent and an earnings growth rate of 13 percent a year in six or seven years.

He hopes to obtain such growth by transforming Emhart from an industrial company into a three-legged animal, symbolized by three bronzed shoes and a three-legged Eiffel Tower model that are displayed in his office.

From that broadened base, Scott seeks double-digit annual growth in the consumer and high-tech areas, and only about 5 percent growth in the industrial segment.

By 1990, Scott envisions Emhart with $3.6 billion in annual revenue divided this way: 29 percent from information and electronic systems, 28 percent from consumer products, and 43 percent from industrial products.

That's in contrast to 1986, when Emhart's industrial segment brought in 78 percent of the company's $2.1 billion in revenue, the consumer segment accounted for 20 percent, and information and electronic systems chipped in 2 percent.

Scott's ambitious plan is not without risks. The restructuring cost Emhart $150 million last year, and sent the company plunging into red ink for a $10.2 million loss in fiscal 1986.

Furthermore, new acquisitions and other costs boosted Emhart's long-term debt to $516 million as of Sept. 26, and its debt as a percent of capital has jumped from 25 percent to 41 percent.

Since last fall, Scott has sold off 18 low-growth businesses that accounted for $400 million in revenue. He also removed 1,100 employes from continuing businesses, consolidated plant facilities and reshuffled the organizational chart.

Even the corporate logo did not escape. A new, more contemporary logo will be unveiled next year to emphasize Emhart's transformation.

But Wall Street analysts seem to approve of the new direction for Emhart. John Pau, an analyst with Bear Stearns, says the company's high-tech thrust makes sense, and he said that while Emhart's debt as a percent of capital is fairly high, the company has a strong cash flow.

He expects Scott's shakeup to result in a more profitable operation.

Mitchell I. Quain, vice president of research for the investment bank Wertheim Schroder & Co., said Emhart is following the path taken by other smart companies in recent years: shedding unprofitable product lines, cutting fat and refocusing what's left.

Quain said that Emhart's long-term debt posed no major problem. "Cash flow is strong. Business is stable, and there's very predictable growth," he said.

Quain said that while Emhart's stock, which split two-for-one on Sept. 30, has dropped since the Oct. 19 stock market collapse, it did not take the battering that many stocks did. It has gone from a high of $26.62 1/2 this year to $24 right before Black Monday, and to $21 at the end of last week.

In addition, earnings were up for the first nine months of this year. The company earned $80.1 million in the period, a 34 percent jump over last year's $59.8 million, not counting the restructuring costs.

Scott still is hot on the acquisition trail. To build up Emhart's consumer segment, he is on the prowl for a do-it-yourself hardware or decorating company to add to Emhart's existing consumer businesses, which include Kwikset door lock sets, True Temper garden tools and golf club shafts, Bostik Thermogrip glue guns and Molly wall anchors.

Many of the company's existing consumer products are offshoots of Emhart's industrial segment, which produces rivets, screws, studs and other mechanical fasteners; adhesives, sealants and other chemical fasteners; machinery used to produce glass products; machinery used to assemble printed circuit boards; and material and machinery for the footwear industry.

Scott has no plans to add to the industrial division.

But he said he is scouting around for another high-tech acquisition, although only a small one, to bring in an additional $40 million or $50 million in revenue and add to the base started with PRC and Advanced Technology.

Robert E. LaRose, president of Advanced Technology, said Emhart is as important to ATI's growth plans as Advanced Technology is to its corporate parent's plans.

LaRose, who founded the company in 1976, wants to transform Advanced Technology into a $1 billion company with 10,000 employes over the next decade.

That will require an annual growth of 20 percent to 25 percent, a rate that the company has failed to hit in recent years after steadily growing that fast for several years.

ATI had considered going public to get the capital and resources needed to win larger contracts. But uncertainty in the marketplace and the desire for a strategic alliance with a larger corporation that had considerable resources led to the agreement to be acquired by Emhart.

Wayne V. Shelton, PRC's president, also is aiming to turn PRC into a $1 billion company.

PRC's growth rate has been about 16 percent during the past five years, not counting the civil engineering division that was sold last year. Shelton's goal is to maintain that growth, but "that's going to be tougher to do," he said.

"We had the benefit of inflation during the early part of that time," he said. "We also had a lot of expansion in government."

With the federal government clamping down on profits and on reimbursable costs, contractors are seeing their businesses squeezed.

The acquisition by Emhart has helped PRC by enabling the company to slash administrative costs, according to Shelton. He has trimmed the costs of running PRC's corporate offices by 50 percent, because Emhart had taken over many of PRC's legal, tax and public relations duties.

For PRC, the sale to Emhart was just one in a series of major changes at the company during the past year.

In March, shortly after the takeover was completed, John M. Toups resigned as PRC's chairman, turning the company over to Shelton.

The jobs of two of the three top operating group presidents have changed hands, and Shelton restructured the top management staff to focus on specific issues.

Shelton said the sale to Emhart made these changes easier, and he pointed to Scott as the reason.

Shelton said he was able "to bring in some new management with relatively minor amounts of discussion, because Peter Scott understood precisely what I wanted to do and why. ... The previous board probably would have required much more discussion," and might have argued against it, he said.

Likewise, Scott "expedited" the time it normally would have taken PRC to make two small acquisitions this year, Shelton said.

The acquisitions, which have combined revenue of about $25 million, were for PRC's realty systems division, which provides automated multiple listings for the real estate industry.

Despite expectations by some competitors in the Washington business community that Emhart will move quickly to merge PRC and Advanced Technology, Scott said he is not making any abrupt changes.

Shelton describes the relationship between the two acquired companies as "kissing cousins," although he said he eventually expects a closer operational relationship between the two firms.

Shelton said he does not expect one company to absorb the other, but rather, speculated that Emhart would "completely rearrange the deck" by taking parts of each company and fitting them together.

Scott said he is taking a wait-and-see attitude about a possible combination of the two companies.

"I've told both operations I'm in no hurry to do any merger," he said.

"In a year or two, who knows? Maybe something will want to come together. But that's not a high priority."

Financial highlights: -----------1987 (nine months)----- 1986 (full year)----- 1985 (full year) ASSETS:..........$1.9 billion ........$1.86 billion.......... $1.5 billion NET INCOME:.... $80.1 million....... ($10.2 million)........ $80.5 million EARNINGS PER SHARE:... $1.28............ (35 cents)................ $2.90

Total shares of common stock outstanding as of Oct. 2362,637,586

Price per share as of Dec. 3121(NYSE)

52-week high/low26 5/8/15 1/2

Key executives and compensation:

Peter L. Scott, chairman, chief executive officer$1,000,000

William C. Lichtenfels, president and chief operating officer$555,000

Dean M. Hennessy, senior vice president, legal counsel$264,000

Achim Knust, senior vice president$315,000

Key shareholders:

Delaware Management Co.3,099,900 shares (4.9 percent)

Institutional owners (122)18,273,149 shares (29 percent)

Insider owners (32)334,966 shares (0.5 percent)

Directors:

Peter L. Scott chairman and chief executive officer

William C. Lichtenfels president and chief executive officer

Richard S. Bodman president, Washington National Investment Corp.

William B. Ellis chairman, president and chief executive officer, Northeast Utilities

James F. English Jr. president, Trinity College

T. Mitchell Ford former chairman and chief executive officer, Emhart Corp.

Marion S. Kellogg retired vice president, General Electric Co.

Michael S. Scott Morton professor of management Sloan School of Management, MIT

John M. Toups former chairman and chief executive officer Planning Research Corp.

Wilson Wilde president and chief executive officer Hartford Steam Boilder Inspection and Insurance Co.