Founded in 1996, OSI has built a strong reputation across the US national security community for its innovative mission-focused capabilities. The Company has supported the Department of Homeland Security (DHS) since its establishment in 2002, and has a twenty-year track record on major ISR programs with the Department of Defense. The company provides comprehensive mission IT, sensor, software and systems engineering, and data analytics services through a diverse prime contract base.
Applied Insight, backed by The Acacia Group, is building an agile mid-market business with the ability to navigate customers to better enabling technologies for collaboration and decision making, combining mission intimacy with a wide reach across leading-edge capabilities and approaches. The acquisition of OSI is the latest advance in that strategy.
Gavin Long, Applied Insight CEO stated “We’re creating a company that works seamlessly at all levels of the most complex and sensitive mission environments. A company that can build the systems infrastructure customers need to manage their mission-critical technologies, handle as much data as their mission requires, and deliver insights that contribute to better decisions. AI and OSI together are highly accomplished in all aspects of this endeavor. It’s an exciting and powerful coupling that we believe customers will find compelling.”
In the coming months, the leadership of AI and OSI will be working to ensure close collaboration on solution design and business development, and investing in a support infrastructure that continues to enable the exemplary customer service that both businesses are renowned for.
This transaction highlights several trends in the current Government Services M&A environment, including:
- The current Administration’s posture towards national security (including border security) provides for significant growth opportunities within the Department of Homeland Security. The 2018 Omnibus spending bill includes $170M for surveillance technology and $190M for new aircraft and sensors for DHS, highlighting the growth potential for well positioned contractors.
- Companies that demonstrate specialized, in-demand capabilities that directly support customer missions continue to garner significant interest in the current M&A environment. The increased use of UAVs for surveillance and reconnaissance has created a growing demand for contractors able to deliver ISR support that blends deep mission knowledge with technical expertise.
- Private equity groups remain extremely active in the government M&A market, including numerous “new platform” investments over the past 12-24 months. Established players such as Arlington Capital Partners (Integrity Applications Incorporated – IAI), and RLH (Illuminate), along with newer players such as NewSpring Capital (The Sentinel Company) and Enlightenment Capital (Everwatch) are creating new buyers in the Government services market.
ABOUT THE MCLEAN GROUP
The McLean Group is a 25-year-old boutique investment bank and financial services firm focused on the Defense, Government & Intelligence (DGI), Security, Critical Infrastructure and Maritime markets. Our 60+ professionals bring deep industry experience and relentless execution to every client engagement. We provide solutions that blend financial creativity with operational expertise. Whether we are providing transaction advisory, valuation opinions or growth capital, our services are unmatched in these core markets.