November 1, 2004
Powerhouse Tech Companies Merge
Top black banks and advertising agencies have achieved growth by acquiring one another, but buyouts between BE 100S industrial/service companies are less common. Two veteran Alexandria, Virginia-based high-tech firms, however, have joined forces to get a jump on the homeland defense contracting market.
Dimensions International (No. 49 on the BE INDUSTRIAL/ SERVICE 100 list with $75.4 million in sales) has acquired SENTEL Corp. (No. 73 on the BE INDUSTRIAL/ SERVICE 100 list with $43 million in sales), enabling each to bid on work they previously passed up. Terms of the deal were not disclosed.
SENTEL is an engineering and software company that builds networked systems that collect biological, chemical, and nuclear contamination data from remote sensors — an antiterrorism capability in very high demand. Its technology guards military bases, government buildings, stadiums, subways, bridges, and tunnels. SENTEL is already very strong in the Air Force, Navy, and other defense agencies, whereas DI’s clients include the U.S. military, federal agencies, and commercial and industrial companies. As an information technology logistics company, DI is best known for its Flight Explorer subsidiary, which tracked commercial aircraft and was the predominant service used by news agencies during the Sept. 11 attacks.
DI was started in 1985 by Dr. Robert L. Wright. Since March 2003, it has been led by the founder’s son, Russell T. Wright, 37. Wright will remain as CEO of the merged company. SENTEL was co-founded in 1987 by James F. Garrett, who will now be president of the SENTEL division. DI’s sales grew 13.7% from 2002 to 2003, and it climbed five spots in its BE 100S ranking. SENTEL’s sales increased 14.7%, jumping nine places higher on the list.
“We’d be looking forward to doing some additional acquisitions,” Wright said. He wouldn’t divulge financial details of a similar deal, but did indicate, “DI’s got a goal of $300 million at some point in this decade.” Wright thinks that’s the “sweet spot” for a Beltway technology contractor, not so much for reaching higher into the 7% to 15% profit margin, but because having a larger presence among government clients wins jobs and boosts market share.
At the start of negotiations, Wright and Garrett required that there be zero layoffs among DI’s 600 and SENTEL’s 300-plus employees. SENTEL’s 14 field activities and DI’s 70 worldwide locations also remain intact.