KUHN CAPITAL Thursday, October 19, 2017
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SAIC to Fund M&A War Chest

9/2/05

SAIC, one of the country’s biggest IT services vendors, is planning a 2006 IPO to raise $1.7B mostly for the purpose of financing M&A.

A 43,000-employee ESOP, SAIC has sales of $1.7B and net income of about $410M. Mostly it delivers IT services to government clientele, in 2004 pulling down $2.5B in multi-year DoD contracts.

Analysts believe SAIC is positioning itself against the day when Pentagon growth slows. According to JSA Research’s Paul Nisbet, “One way to combat a period of lesser growth is through acquisitions.”

While government IT services may comprise SIAC’s largest single activity, the firm also plays in nearly numberless other technology services and systems fields, e.g., life sciences, financial services, enviromental and energy industry applications; then miniature unmanned helicopters, battlefield servers and telecom networks.

What companies SAIC would buy is therefore, at the moment, anyone’s guess. In fact, SAIC is in so many businesses that one wonders if the cohesion of its employee-owned structure has been one of the reasons for its success.


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