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KippsDeSanto & Co. Advises 2020 Company, LLC on its Sale to Acentia

KippsDeSanto & Co. is pleased to send you the attached press release announcing the sale of our client, 2020 Company, LLC (“2020″ or “the Company”), to Acentia, a portfolio company of Snow Phipps Group.  Acentia acquired 2020 to deepen its presence in the highly-lucrative Federal healthcare market, expand its information technology (“IT”) capabilities suite, and gain access to 2020’s contracting vehicles.  The transaction closed on March 30, 2012.

Headquartered in Falls Church, VA, 2020 is a leading provider of systems modernization, data collection & analysis, and mission support services, with a sharp focus on the areas of healthcare, education, and science.  The Company directly supports priority mission needs for an array of attractive Federal agencies, such as Centers for Medicare and Medicaid Services (“CMS”), Centers for Disease Control and Prevention (“CDC”), Food and Drug Administration (“FDA”), Department of Education, and National Oceanic and Atmospheric Administration.  The Company has positioned itself squarely in front of enduring funding streams by constructing a portfolio of highly sought-after and utilized contracting vehicles, including the $5 billion CMS Enterprise System Development (“ESD”), the $3 billion CDC Information Management Services (“CIMS”), and the $2 billion FDA Enterprise System Life Cycle Management Support (“ELMS”) contract vehicles.  Underpinned by a robust process-oriented infrastructure, unique level of technical depth, and an industry-recognized management team, 2020 is poised to address Federal clients’ most complex mission challenges such as the implementation of global health data exchanges, modernization of legacy technology infrastructures, and maintenance & overhaul of antiquated Medicaid payment systems.

We believe this transaction demonstrates several key trends in the government technology M&A environment:

  • Intense interest from buyers and investors in accessing Federal health markets given strong and long-term anticipated growth
  • Continued emphasis on and attraction to high value, long-term contracts and contracting vehicles (e.g., CMS ESD)
  • Buyers seeking contractors who provide mission-oriented systems modernization services and high-end development solutions that are critical to the maintenance of legacy technology infrastructures in the Federal space
  • Enhanced level of private equity investor participation both as a direct buyer (seeking a platform) and via existing portfolio companies
  • The importance and value of a highly-sophisticated, professional back office able to scale alongside growth

KippsDeSanto & Co. is an investment bank focused on delivering exceptional M&A and financing transaction results for leading technology and defense companies.  For more information on KippsDeSanto & Co., please visit www.kippsdesanto.com.

We welcome the opportunity to discuss how KippsDeSanto & Co. can help you achieve your strategic objectives.  For more information on this particular transaction, please contact one of the deal team leaders below.

KippsDeSanto & Co., member FINRA / SIPC, is not affiliated with other companies mentioned herein.

PRESS RELEASE

Acentia Merges with Leading Federal IT Provider 2020 Company, LLC Combined Company Positioned to Address Mission-Critical Needs of Federal Health, Defense, Civilian and Commercial Customers

FALLS CHURCH – April 2, 2012 – Acentia today announced that it has acquired 2020 Company, LLC, a Federal IT solutions provider at the forefront of transformational health IT and other projects across the public sector. The newly combined company, which will be known as Acentia, employs more than 1,200 employees. 2020’s Robert McCord will immediately assume the position of President and Chief Operating Officer of Acentia. Todd Stottlemyer will continue as CEO.

Acentia is a premier provider of technology and management solutions that help customers across the Federal Government, health and commercial markets meet their mission-critical requirements on programs of national significance. Snow Phipps Group LLC, a New York-based private equity firm is the principal investor in Acentia. Snow Phipps acquired a majority stake in a predecessor firm in 2009 as part of a strategy to build a leading company in the government technology services space.

2020, based in Falls Church, Va., is a premier professional services firm that delivers business and technology solutions through consulting and outsourcing services to the government, in the areas of health, education, and science. For the past 11 years, 2020 has specialized in custom system maintenance, systems development and integration, technology infrastructure support, and a variety of business services, including program/project management, business process support, and mission support services. 2020 is a CMMI Level 3 and an ISO 9001:2008 organization that has invested heavily in creating a process-driven, success-oriented organization focused on achieving its customers’ goals. Customers include: the Centers for Medicare and Medicaid Services (CMS); the Centers for Disease Control and Prevention (CDC); the Department of Education; and the National Oceanic and Atmospheric Administration (NOAA).

“The addition of 2020 extends Acentia’s reach with the services and expertise to pursue and execute more and even larger opportunities on programs of national significance,” said Stottlemyer. “This merger aligns with the goals we stated publicly last year when we re-branded the company, specifically, that we would look to grow Acentia in order to provide expanded capabilities to our customers. It represents a significant win for both companies’ employees and customers.”

“As owners of the company, we spent a great deal of time and energy looking at strategic options for continued growth that would preserve the vision and values upon which 2020 was founded,” said 2020 CEO Paresh Ghelani. “After engaging in a very diligent process we chose to merge with Acentia, primarily because we believe in its leadership, exemplified by CEO Todd Stottlemyer. He, along with his management team, shares our cultural philosophy of building an employee-centric organization that focuses on the customer.”

“Since founding 2020 11 years ago, Haresh Bhungalia and Paresh Ghelani have been incredible stewards of the company and their employees,” said Stottlemyer. “I am honored that they have entrusted Acentia with the responsibility of carrying on that stewardship as we build the next great mid-tier leader within our industry.”

The combined company creates immediate and significant benefits to customers, including:

  • Expanded Capabilities – Our combined capabilities, including Modernization, Cloud Computing, Strategy and Enterprise Architecture, Application Development, Operations and Maintenance, Data Analytics, and Mobility, demonstrate the breadth and depth of Acentia’s experience and expertise.
  • Proven Processes and Execution – A shared commitment to repeatable, performance-driven processes, adherence to industry best practices, and unquestioned integrity as demonstrated through “the Acentia Way” of program management and execution. We are now one of only a few companies certified as both ISO 20000 and CMMI Level 3.
  • Enhanced Resources and Reach – An expanded talent pool of more than 1,200 employees and extended national footprint includes new offices in Atlanta and Baltimore.
  • Seasoned Management Team – A tested management team that includes several 2020 executives—Robert McCord, President and COO of Acentia (formerly President and COO at 2020), and Mike Raymond, Chief Strategy Officer of Acentia (formerly Chief Strategy Officer at 2020)—who have broad and deep industry expertise.

“Modernization of health and other government IT systems is one of our nation’s most mission-critical priorities, and today’s announcement aligns two companies positioned at the forefront of some of the most innovative, transformational technology initiatives on behalf of Government agencies and the citizens they serve,” said McCord, President and COO of Acentia. “With a shared mission, purpose, and culture, we believe that our customers will see tangible and immediate advantages.”

“Merging 2020’s capabilities, relationships, and management expertise with Acentia is a very positive step forward” said Leif Soderberg, Chairman of the Board of Acentia and an Operating Partner with Snow Phipps. “The combined business is well positioned to grow but also retain the flexibility and responsiveness that have contributed to their success in the past.”

In addition to Snow Phipps’ investment, the senior credit bank financing for the 2020 acquisition and a line of credit for future working capital needs are being provided by RBS Citizens (Lead Arranger), Citizens Bank (Administrative Agent), Bank of America, N.A., M&T Bank, and SunTrust Bank.

KippsDeSanto & Co. acted as exclusive financial advisor to 2020 in this transaction.

About Acentia

Acentia is a premier employer and provider of technology and management solutions that help customers meet their mission-critical requirements on programs of national significance. Our professionals build trusted relationships with our customers by tackling their most difficult challenges while consistently demonstrating value to customers across the Federal Government, health and commercial markets. To learn more about our company and broad range of services, visit www.acentia.com.

About Snow Phipps Group, LLC

Snow Phipps is a New York-based private equity firm founded by Ian Snow and Ogden Phipps that seeks to acquire middle market businesses in attractive industries by leveraging the expertise of exclusive operating partners who are seasoned industry executives. To learn more about Snow Phipps, visit www.snowphipps.com.

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