New mouths to feed
- By Tania Anderson
- Mar 28, 2004
Several large integrators have gone through reorganizations because of significant acquisitions. For example, ITS Services Inc., based in Springfield, Va., was forced to change its internal structure when it merged Jan. 22 with Science and Engineering Associates Inc., a New Orleans company that provides Web-based e-business management solutions.
Both companies provide information technology services to government and commercial customers but neither had overlapping clients, making for an interesting merger, said Todd Stottlemyer, chief executive officer of ITS. The transaction allowed the combined company to hold on to more than 900 employees.
The result of the merger was a single entity that operated two sectors — national security and federal technology. There is also a third group, a technology research and development operation that came with SEA. The new company also established six corporate service centers for internal operations such as finance, human resources and information systems. The whole process took a month, according to Stottlemyer.
"Uncertainty in any merger or any acquisition or any reorganization works against you," he said. "We want to keep people focused on the marketplace as opposed to the organizational issues."
The companies are exploring how to brand themselves as one. Stottlemyer said a name change would be likely after officials get feedback from focus groups and a better understanding of the companies' cultures. No matter what it is called, it will be a $200 million enterprise.
Analysts are hard-pressed to find one reason to explain why so many integrators are reorganizing. And it's not clear if more are to come.
"The reasons for large-scale reorganizations are rarely simple," said Anne Reed, president of Acquisition Solutions Inc. "It's everything to do with them trying to be successful in their marketplace."
Anderson is a business writer in Arlington, Va. She can be reached at firstname.lastname@example.org.