Salient CRGT Inc. announced that it has agreed to acquire Information Innovators (Triple-i), a Springfield, Virginia-based provider of healthcare IT services to the federal government.  Triple-i provides healthcare IT services, enterprise IT solutions, cloud services, and agile development to customers including 11 out of the 15 cabinet-level federal departments.  The deal is expected to close within the first quarter of 2017.  Both companies are owned by private equity firms with CRGT backed by Bridge Growth Partners LLC and Frontenac Co., and Triple-i by DFW Capital Partners.

Deal terms were not disclosed.  Salient CRGT was advised by RBC Capital Markets and Sagent Advisors while Triple-i was advised by KippsDeSanto & Co.    

ManTech International Corporation announced that it has acquired Edaptive Systems LLC, a provider of IT solutions primarily to federal health agencies including the Centers for Medicare & Medicaid Services. Based in Owings Mills, Maryland and with over 250 employees, Edaptive has core competencies including agile software development, testing and automation, business intelligence, data abstraction and IT services. Deal terms were not disclosed.

Cognosante announced that it has acquired Business Information Technology Solutions (BITS), a provider of IT services and solutions to the VA and DoD.  BITS is a prime contract holder on the VA's $22.3 billion Transformation Twenty-One Total Technology Next Generation (T4NG) vehicle. and has specific expertise in healthcare systems, enterprise business systems, business intelligence, and data analytics in the public health sector.  Deal terms were not disclosed.   

Magellan Health Inc. announced that it has completed its acquisition of Armed Forces Services Corp. (AFSC), a firm focused on providing and managing behavioral health and specialty services to the federal government and military.  AFSC has approximately 60 contracts with federal agencies and 1,800 employees and subcontractors that provide life coaching, counseling, training, rehabilitation, transition assistance, recruitment and retention, and family programs.  

The base purchase price is $117.5 million with an earn-out of $10 million.  AFSC had 2015 net revenues of approximately $135 million with segment profit of $16.5 million.  

Ontario Systems, a portfolio company of Arlington Capital Partners, announced that it has acquired Columbia Ultimate Business Systems.  Based in Vancouver, Washington, Columbia provides software and solutions to outsourced revenue cycle management and accounts receivable management firms and government clients.

According to Matt Altman, a Managing Partner at Arlington states: “The combination of Ontario and Columbia creates a clear market leader in healthcare RCM and ARM software. Building upon relative strengths in the healthcare and government markets, Ontario and Columbia together will be ideally positioned to further strengthen its product offerings across a wide array of end-markets and support the continued advancement of its software and technology infrastructure.”

Deal terms were not disclosed.

Magellan Health Inc. announced that it has agreed to acquire Armed Forces Services Corporation (AFSC), a provider of behavioral health and specialty services to the Federal government including the US military.  Based in Arlington, Virginia, AFSC has approximately 1,800 employees and generated 2015 revenues of $135 million with segment profit of $16.5 million. 

The initial purchase price is $117.5 million with an additional $10 million paid for retention of certain core assets of the business.  The deal is expected to close by the third quarter of 2016.

In the second healthcare-related deal of the day, Bivarus Inc. announced that it has acquired The Jackson Group Inc., a healthcare-focused measurement and consulting firm that supports healthcare organizations, commercial businesses and government agencies.  The Jackson Group is one of 37 vendors approved by the Centers for Medicare & Medicaid Services to participate in the CAHPS program, which is a mandatory survey program for healthcare organizations.  Deal terms were not disclosed.       

DLH Holdings Corp. announced that it has acquired Danya International Inc., a provider of technology-enabled program management, public health expertise, consulting, and digital communications solutions primarily to the Department of Health and Human Services.  Danya generated adjusted 2015 EBITDA of $6.3 million.  The purchase price is $38.75 million comprised of $36.25 million in cash and approximately $2.5 million in restricted common stock.  

At first glance, this looks like a solid deal for DLH.  They were able to acquire a company with complimentary capabilities and customers in the Federal healthcare space for a reasonable adjusted EBITDA multiple of just over 6 times.  In fact, Danya’s 2015 adjusted EBITDA of $6.3 million is almost double DLH’s adjusted EBITDA of $3.2 million making this deal very accretive.  We’ve seen some rich deals in the healthcare space but this doesn’t appear to be one of them.     

IBM announced that it has completed its acquisition of Truven Health Analytics from Veritas Capital, a deal valued at $2.6 billion.  Truven provides cloud-based healthcare data, analytics and insights to government agencies, hospitals and life sciences companies.  This is IBM’s fourth health data acquisition since launching Watson Health in April 2015.

Tetra Tech Inc. announced that it has acquired INDUS Corp., a Vienna, Virginia-based IT firm focused on data analytics, geospatial analysis, secure infrastructure, and software applications for the US government.  INDUS has more than 150 employees and various contract vehicles including GSA Alliant, CIO-SP3, and NETCENTS 2.

It appears that Tetra Tech acquired INDUS to augment its spatial and water information capabilities.  According to Dan Batrack, Tetra Tech's Chairman and CEO: "With our combined expertise, we can assist customers in managing large data repositories and expand our smart water services, including analysis and real-time decision making in the water sector.”

Deal terms were not disclosed.  The McLean Group LLC advised INDUS on the transaction.