ManTech Buying KGS For $115 Million In Bet On More Government Business

With its planned cash purchase of Kforce Government Solutions, ManTech hopes to boost its capabilities around cybersecurity, software development, network services, and the solution provider could win part of a massive government contract in the bargain.

ManTech CEO Kevin M. Phillips told CRN that ManTech will pay a total of $115 million for KGS. Wall Street responded positively to the news, sending shares of Herndon, Va.-based government contractor ManTech higher by 1.67 percent to $54.98.

Phillips told CRN that KGS has a TGN4 contract, which is the primary vehicle used by the U.S. Department of Veterans Affairs for IT procurement. He said the multiple award contract is worth a total of $22 billion and continues until 2026, and represents a larger trend of government agencies seeking digital transformations.

“It’s a good combination for us,” he said. “The transformation of technology is fairly rapid right now and that’s being applied on many fronts to our federal customers. There’s the enterprise IT component, which a lot of customers are dealing with moving to cloud, doing software development and expanding the use of automation for their mission.”

Headquartered in Fairfax, Va., KGS – formerly a subsidiary of Kforce -- provides “technology solutions, transformation management, data management and analytics in support” of federal health and defense agencies, ManTech said in a statement. The company has many customers within the Department of Veterans Affairs. The deal brings 500 highly skilled employees under the ManTech umbrella. KGS had annual revenues of approximately $98 million in 2018, ManTech said.

“We are thrilled to become a part of ManTech,” KGS CEO Maureen Coyle said in a statement. “This strategic combination will help us better meet our clients’ needs by broadening and deepening our solution offerings. Additionally, our cultures are well aligned and our employees will benefit from expanded professional development opportunities.”

ManTech said it will fund the purchase with cash on hand as well as additional funding from an existing line of credit. ManTech said the deal is subject to various closing conditions and approvals, including approval under the Hart-Scott-Rodino Act, and is expected to be completed in March 2019.