CM Equity Partners has agreed to sell its portfolio company Preferred Systems Solutions (PSS) to publicly-traded STG Group for a total consideration of approximately $119 million. This transaction is expected to close before the end of March. CM Equity Partners acquired PSS in September 2007.
PSS is a provider of software engineering & development; cyber security; cloud computing; systems engineering & technical assistance; business applications and financial management; and program and acquisition management services. Customers include the intelligence services, US Army, US Navy, Defense Logistics Agency, US Transportation Command, Defense Advanced Research Project Agency (DARPA), Federal Bureau of Investigation (FBI), and the Departments of Homeland Security and Transportation, among others. PSS is led by CEO Scott Goss and is headquartered in McClean, VA (www.pssfed.com).
“We are extremely pleased to become part of the STG Group as it will significantly increase our ability to provide an expanded set of advanced technology capabilities across the broad spectrum of critical national security programs,” said Mr. Goss. “The company’s commitment to outstanding customer support enables world class services in support of our country’s warfighters and the federal civilian workforce working daily to safeguard our country.”
CM Equity Partners makes control and minority investments of $5 million to $40 million in companies with $20 million to $200 million in revenues and $3 million to $20 million of EBITDA. Sectors of interest include federal services and aerospace & defense. The firm has made more than 70 acquisitions and investments since its founding in 1992. CMEP is associated with Carl Marks & Co., a private family investment office with merchant banking activities dating back to 1925. CMEP is based in New York (www.cmequity.com).
STG Group (OTC: STGG) is a provider of technology, cyber, and data services to more than 50 defense, intelligence, federal, and other national security agencies. The company was formerly known as Global Defense & National Security Systems and changed its name to STG Group, Inc. in November 2015. The company was founded in 1986 and is headquartered in Reston, VA (www.stg.com).
“We are excited to announce the next step in our transformation strategy for STG Group. With the acquisition of PSS, we are advancing our technological agility and ingenuity to meet the most complex and demanding national security challenges facing the US,” said STG President Phillip Lacombe.
Sagent Advisors, an investment bank with offices in New York, Chicago and McLean, VA (www.sagentadvisors.com), was the financial advisor to STG Group on this transaction.
© 2017 Private Equity Professional | February 24, 2017
