Madison Dearborn Partners and CoVant have completed their previously announced acquisition of LGS Innovations from Alcatel-Lucent. The all cash transaction totals $200 million of which 50 percent is being paid at closing and the balance paid based on LGS’ operating results during the 2014 fiscal year. Kevin Kelly, CEO, and the rest of the LGS Innovations management team will remain with the company.
“LGS Innovations has long been at the leading edge of developing and delivering highly innovative products and services to the US federal government, and we are pleased to now be in a position to help the team expand its business,” said Doug Grissom, a Managing Director at Madison Dearborn and the head of the firm’s Business and Government Services team. “We also are delighted to partner with CoVant. We look forward to growing LGS Innovations in concert with them, the LGS management team and the LGS employees.”
LGS Innovations is a provider of research and advanced networking and communications development services to the US federal government, state and local governments, foreign governments, and commercial enterprises. LGS’ services are used to build advanced wireless, optical, and wired products and other applications customized for specific mission environments. The company’s products are used by the public safety, battlefield, and emergency and first responder communities. LGS will remain the exclusive reseller of Alcatel-Lucent products and services to the US federal government. LGS employs more than 450 scientists and engineers and is headquartered in Herndon, VA with additional offices in Colorado, Illinois, Maryland, New Jersey, New Mexico, and North Carolina (www.lgsinnovations.com).
The new ownership structure unlocks new markets and growth opportunities that were previously unavailable to LGS Innovations. “As a market leader with a differentiated offering, LGS Innovations is a highly attractive business,” said Joseph Kampf, CEO of CoVant. “The company is uniquely positioned for new growth channels as it can now pursue markets and customers previously closed to them as a subsidiary of a non-US company. LGS Innovations has a strong portfolio of intellectual property, patents and products. Our focus will be to help the company build on this platform and deliver its technology solutions to an expanded array of clients around the world.”
CoVant is an investor group established by Joseph Kampf and other former senior executives of Anteon International Corporation. This team grew Anteon from a $100 million company when acquired in 1996 to a $1.7 billion company when sold in 2006 to General Dynamics for $2.2 billion. CoVant was formed for the purpose of acquiring and growing companies in the federal technology solutions marketplace, and has teamed with Madison Dearborn Partners on behalf of its Fund VI entity to pursue such acquisitions. CoVant is based in McLean, VA (www.covant.com).
Madison Dearborn Partners has more than $18 billion of capital under management. Sectors of interest include basic industries; business and government services; consumer; financial and transaction services; health care; and telecom, media and technology services. The firm has 44 investment professionals, consisting of 29 Principals and 15 Associates. Madison Dearborn was founded in 1992 and is based in Chicago (www.mdcp.com).
© 2014 PEPD • Private Equity’s Leading News Magazine • 4-2-14
