Initiatives by the U.S. Government to accelerate digital transformation and information technology modernization projects are at an all-time high, with the White House FY 2022 budget requesting $109.4 billion in funding to make critical technology infrastructure up to date and ready for ongoing and emerging challenges. Congress is likely to increase funding from there, leaving the contractors that receive roughly 83% of federal IT budget dollars facing a significant workload of projects to tackle in the coming years. Contractors and consultants are already preparing to take on the new challenges, with a leading consulting and digital services provider recently announcing the acquisition of a major federal IT contractor.
ICF declared its acquisition of Creative Systems and Consulting (Creative) in a recent press release, pointing to an estimated $60 million in FY 2021 revenue, anticipated 2022 growth in the mid-teens, and margins at the high end of the ICF federal government range. ICF’s corporate development team worked in conjunction with Baird, Creative’s financial advisor, to manage the deal. While the details of the transaction were not made public, it is expected to close before the end of 2021.
"This transaction is aligned with our strategy of pairing organic growth with select acquisitions that strengthen ICF's position in key growth markets," said John Wasson, the company’s Chairman and Chief Executive Officer. "Creative's expertise in cloud development considerably expands our qualifications in the federal IT modernization/digital transformation arena… Importantly, the cultural fit is excellent, highlighted by a shared commitment to delivering value to clients while making a difference in the communities we serve."
Creative’s 270-person team brings expertise in platforms like Salesforce, ServiceNow, and Microsoft, dovetailing with ICF’s existing capabilities in the space. The company has been designing, implementing, and managing SaaS environments via a DevSecOps approach since 2010. Paired with ICF’s domain expertise in ServiceNow and its digital, cyber, and cloud modernization services, the pairing looks to be a match between two very strong performers.
With federal government departments and agencies struggling to secure vulnerable systems, speed workflow, manage increasingly large datasets, and migrate away from legacy technology, the acquisition comes at a crucial time, bringing much-needed talent and expertise to ongoing and new IT modernization projects.