Organizational Strategies, Inc (OSI), a leading provider of Intelligence, Surveillance and Reconnaissance (ISR) services, analytics, and mission IT services to government customers announced its acquisition by Applied Insight,a market leader in solving complex technology challenges for federal government customers. The McLean Group's Aerospace, Defense & Government Services (ADG) practice served as the exclusive transaction advisor to Organizational Strategies. Terms of the acquisition were not disclosed.
Founded in 1996, OSI has built a strong reputation across the US national security community for its innovative mission-focused capabilities. The Company has supported the Department of Homeland Security (DHS) since its establishment in 2002, and has a twenty-year track record on major ISR programs with the Department of Defense. The company provides comprehensive mission IT, sensor, software and systems engineering, and data analytics services through a diverse prime contract base.
“We’re creating a company that works seamlessly at all levels of the most complex and sensitive mission environments. A company that can build the systems infrastructure customers need to manage their mission-critical technologies, handle as much data as their mission requires, and deliver insights that contribute to better decisions. AI and OSI together are highly accomplished in all aspects of this endeavor. It’s an exciting and powerful coupling that we believe customers will find compelling.”
- Gavin Long, Applied Insight CEO
In the coming months, the leadership of AI and OSI will be working to ensure close collaboration on solution design and business development, and investing in a support infrastructure that continues to enable the exemplary customer service that both businesses are renowned for.
This transaction highlights several trends in the current Government Services M&A environment, including:
- The current Administration's posture towards national security (including border security) provides for significant growth opportunities within the Department of Homeland Security. The 2018 Omnibus spending bill includes $170M for surveillance technology and $190M for new aircraft and sensors for DHS, highlighting the growth potential for well positioned contractors.
- Companies that demonstrate specialized, in-demand capabilities that directly support customer missions continue to garner significant interest in the current M&A environment. The increased use of UAVs for surveillance and reconnaissance has created a growing demand for contractors able to deliver ISR support that blends deep mission knowledge with technical expertise.
- Private equity groups remain extremely active in the government M&A market, including numerous "new platform" investments over the past 12-24 months. Established players such as Arlington Capital Partners (Integrity Applications Incorporated - IAI), and RLH (Illuminate), along with newer players such as NewSpring Capital (The Sentinel Company) and Enlightenment Capital (Everwatch) are creating new buyers in the Government services market.
About The McLean Group
The McLean Group is an employee-owned investment bank that provides objective strategic and financial advice on mergers and acquisitions and business valuations. The firm's ADG team is one of the largest dedicated groups in the country and has deep transactional expertise in nearly every segment of the government market. Continuing its track record as a leading advisor to middle market companies in the ADG industry, The McLean Group has closed 78 transactions since 2010. The firm's transaction advisory and valuation services reflect comprehensive industry knowledge, extensive transactional successes, commitment to providing senior-level attention to every client engagement, and real-time understanding of industry-specific valuation drivers.
