This is technology M&A deal number 257 that ChannelE2E has covered so far in 2021.
M&A Deal Valuation: The Liberty IT Solutions acquisition has a valuation of roughly 13.5x expected FY22 adjusted EBITDA, net of anticipated tax benefits, at the midpoint, according to a Booz Allen financial presentation about the buyout. Liberty has built a backlog of more than $2 billion over the past 18 months, Booz Allen adds.
The buyer expects the deal to be immediately accretive to Booz Allen’s revenue growth rate, adjusted EBITDA margin, and adjusted diluted earnings per share upon closing. Booz Allen has sufficient cash to fund the transaction but is exploring final funding sources. Net leverage of ~2.5x is expected at close, the buyer says.
Booz Allen Acquires Liberty IT Solutions: Expected IT Consulting Synergies
Liberty is headquartered in Herndon, VA, with offices in Exton, Pennsylvania and a center of excellence in Melbourne, Florida. The company employs approximately 600 solution architects, engineers, and other technical staff. Many of those team members are Salesforce cloud CRM application experts.
The Liberty team will become part of Booz Allen’s network of remote solution centers, including its digital hub in Charleston, South Carolina, the buyer says.
Key focus area for the deal include:
- End-to-End Digital Solutions that involve API development, as well as Low Code/No Code (LCNC) solutions.
- Expanded Salesforce Capabilities. Liberty a Salesforce Navigator Expert in the Public Sector. The company has completed 70+ Salesforce projects and production scale implementations. Liberty employs 140+ Salesforce architects, administrators, managers, and developers; and those employees hold 340+ Salesforce certifications.
- Advanced Technology Integration across artificial intelligence, machine learning, cybersecurity, and more.
Booz Allen Acquires Liberty IT Solutions: Executive Perspectives
In a prepared statement about the deal, Booz Allen President and CEO Horacio Rozanski said:
“This acquisition supports our long-term strategy to drive continued growth by investing in innovative technologies and talent at scale. The addition of Liberty strengthens our unique market position as a leader in digital transformation, accelerates already robust growth in our health business and beyond, and delivers value for our people, our clients, and our shareholders.”
Added Kristine Martin Anderson, executive VP at Booz Allen:
“As the government pushes to accelerate the modernization of IT systems to increase efficiencies and improve outcomes, this acquisition will strengthen our ability to meet their critical needs. The addition of the Liberty team and capabilities will help us meet those needs together, propelling our digital transformation journey by blending deep technical expertise with more than a century of consulting heritage.”
Concluded Chris Bickell, partner at Liberty:
"Booz Allen and Liberty share a deep commitment to helping organizations achieve their goals through best-in-class solutions delivered with integrity, courage, and ingenuity. By pairing Liberty’s leading Salesforce and LCNC qualifications with Booz Allen’s advanced technologies and proven people, processes, and systems, we are scaling that critical support to deliver the essential transformation that clients need.”
Noteworthy M&A Deals: Booz Allen, Government IT Services, Salesforce Partners
Booz Allen is known to make occasional tuck-in acquisitions and strategic investments. Examples include buying MDR (managed detection and response) cybersecurity firm Morphick in 2017, and investing in Tracepoint in January 2021.
Booz Allen CEO Horacio Rozanski and CFO Lloyd Howell both hinted in late January 2021 that Booz Allen was planning to make more acquisitions.