Deltek Systems Inc., a Herndon company that makes software for government contractors, engineering and construction firms, said yesterday it has acquired Wind2 Software Inc., a Fort Collins, Colo., competitor.
The deal marks the first step in Deltek's plans for expansion under new owners and leadership.
In April, New Mountain Capital LLC, a New York private-equity firm, bought a majority stake in the 22-year-old firm. In June, Kevin T. Parker, former chief financial officer and co-president of PeopleSoft Inc., the software giant acquired by Oracle Corp. in January, was brought in as the company's new chief executive. He replaced Kenneth E. deLaski, who continues to serve as chairman of the board.
Financial terms of the Wind2 acquisition were not disclosed, but Parker said it was an all-cash deal valued at more than $10 million. He also said he expects Deltek to make four or five more acquisitions in the next year.
"I think you're going to hear more from us in the coming months," he said.
Deltek sells business software that helps companies manage the financial and human resources aspects of big projects. For example, a government contractor might use the software to document the labor and materials costs incurred on a contract, track the work of each employee assigned to the project and generate progress reports for clients.
Most of Deltek's 8,000 customers, including Bechtel Corp. and CACI International Inc., are federal contactors or engineering, architecture or construction firms, but Parker hopes to expand the client list to include consulting and information technology companies. Wind2 has 3,000 customers, most of them small and medium-size engineering, architecture and contracting firms. The addition of Wind2's 85 employees brings Deltek's headcount to about 800.
Deltek has operated largely under the radar in the past couple of years, but that wasn't always the case.
The firm was founded in 1983 by Donald deLaski, who handed the reins to his son, Kenneth deLaski, in 1996. Deltek held an initial public offering in February 1997, and its stock rose to $24.50 during the Internet frenzy. For a while, it continued to post impressive financial results -- in 1999, for instance, the firm had a $17.2 million profit on $98.2 million in revenue.
But the bottom soon fell out of the software market, and by 2001 the company's sales had flattened out and its profit fell to $2.5 million. Deltek's stock price took a beating, and executives became increasingly frustrated with the pressures that come with being a publicly traded company. In June 2002, the deLaski family, which still owned 55 percent of Deltek's stock, took the company private again.
Last year, Deltek generated $123 million in revenue, and the new chief executive said he expects that figure to grow by 20 percent for 2005. He also hinted that the company may try its luck again in the public markets in the years ahead.
"I think there is a clear possibility that we may consider that," he said.