Fulcrum IT Sold to Huntington Ingalls

Boyne Capital and Grindstone Partners have sold Fulcrum IT Services to publicly-traded Huntington Ingalls Industries (NYSE: HII) for $193 million. Boyne and Grindstone acquired Fulcrum in April 2010 in partnership with management.

Fulcrum specializes in providing information technology consulting services primarily to federal customers in the defense, intelligence, education and healthcare sectors. The company has specific capabilities in software development, data analytics, cyber security, advanced engineering across the C5ISR (command, control, communications, computers, combat systems, intelligence, surveillance, and reconnaissance). Fulcrum, led by CEO Jeff Handy, is headquartered in Centreville, VA (www.fulcrumco.com).

“We greatly appreciate the support that Boyne and Grindstone have provided over the last nine years,” said Mr. Handy. “It has been a tremendous partnership, in the truest sense of the word. They sourced and facilitated growth through acquisition and supported our leadership in growing organically. Over the course of our relationship, we were able to grow revenues from $22 million to over $160 million and EBITDA from $2 million to $17 million.”

“Boyne is proud to have been a long-term partner of Fulcrum, its management team, and Grindstone,” said Derek McDowell, Boyne’s managing partner and CEO. “It has been a rewarding experience working with Jeff Handy, Carroll Johnson, Fulcrum’s CFO, and Fulcrum’s other managers. During our ownership period, Fulcrum has become a highly-respected solution to federal government customers in the defense, intelligence, education and healthcare sectors due to management’s strategic vision and excellent execution. We are very excited for Fulcrum to join HII’s technical solutions division and firmly believe in the continued success of the business.”

Huntington Ingalls Industries (HII) designs, builds, overhauls, and repairs military ships. It is the largest military shipbuilder in the United States, with its main shipyard located in Newport News. The company’s technical solutions division – with more than 5,000 employees in 35 states and 11 countries -provides professional services to a government and commercial customers in the areas of fleet maintenance and modernization, unmanned solutions and rapid prototyping, software development and network engineering, training systems, logistics support, nuclear engineering and fabrication, and oil and gas engineering. HII is led by CEO Mike Petters and had $8 billion of revenue in 2018 (www.huntingtoningalls.com).

“Through six key acquisitions and the award of an expanded portfolio of contracts, Fulcrum’s management steered the company closer to the client’s mission and turned Fulcrum into a leading provider of critical services to many agencies of the United States Government,” said Michael Bluestein, managing partner at Grindstone. “Their efforts and leadership drove tremendous growth in the company and impressive returns to the management team and investors.”

Boyne makes investments in lower middle market companies that have revenues of less than $100 million and EBITDA of $2 million to $10 million. Sectors of interest include healthcare services, agriculture, consumer products, niche manufacturing, and business & financial services. In July 2017, Boyne closed its debut institutional fund, BCM Fund I LP, with $126 million of capital commitments, surpassing the original target of $100 million. Boyne was founded by Mr. McDowell in 2006 and is headquartered in Miami (www.boynecapital.com).

Grindstone Partners invests in service, healthcare, software and light manufacturing companies that have revenues above $10 million. The firm was founded by Mr. Bluestein in 2009 and is headquartered in Alexandria, VA (www.grindstonepartners.com).

Houlihan Lokey (www.HL.com) was the financial advisor to Fulcrum IT Services, Boyne Capital and Grindstone Partners on this transition. The Houlihan Lokey team was led by Susan Gabay.

© 2019 Private Equity Professional | March 11, 2019

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