ManTech sells off MSM unit
- By David Hubler
- Feb 16, 2007
ManTech International, a provider of information technologies and solutions to federal agencies, is selling its wholly owned subsidiary MSM Security Services.
ManTech said Feb. 15 it has entered into a definitive agreement to sell MSM Security Services to MSM Holdings, which is owned by George Pedersen, ManTech’s chairman and chief executive officer, for $3 million in cash. The transaction is expected to close by the end of the month.
ManTech entered the personnel security investigation business in 2000 when it was awarded a contract from the Defense Security Service (DSS). In 2003, the company won an additional contract from DSS through a joint venture with MSM. Shortly afterward, ManTech acquired MSM.
In a statement, Pedersen said ManTech entered the personnel security investigation business believing that it would change from a labor-intensive model to a technology services business consistent with ManTech’s strategy and direction. “This change did not occur and the subsidiary is not aligned with ManTech’s core business and strategic direction,” he added.
ManTech said it has worked with a nationally recognized investment banking firm since April 2005 to divest its MSM subsidiary.
“This is a very complex and difficult business for an acquirer to understand,” said Kevin Phillips, executive vice president and chief financial officer at ManTech. He said a number of firms expressed interest and some made offers, “but we could not agree on acceptable terms and close a transaction.”
Last month Pedersen offered to purchase the MSM subsidiary. “This subsidiary has sustained losses over the past three years and has been a persistent cause of concern for our shareholders,” he said.
ManTech’s board of directors approved the purchase.
David Hubler is the former print managing editor for GCN and senior editor for Washington Technology. He is freelance writer living in Annandale, Va.