By Stephen Phillips
DynCorp, a US systems integration and outsourcing firm said yesterday it would buy GTE Information Systems LLC, a unit of US local phone giant, GTE Corp, to diversify the range of services it touts to government agencies, its largest market.
The deal, the financial terms of which neither company would reveal, also relieves GTE Corp of the last vestiges of its Government Systems business, which it has deemed non-core and systematically sought to jettison since 1996. The firm said it recently sold the other three divisions of its government business to General Dynamics Inc. GTE took a decision to focus exclusively on what it calls data, voice and video communications in the wake of the 1996 Telecommunications Act, which prized the US local phone market open to competition, a spokesperson told ComputerWire.
Reston, Virginia-based DynCorp, one of the largest privately-held technology companies in the US, said the acquisition added telecommunications and networking systems expertise to the services portfolio it offers to government clients. Contracts with US federal government agencies, from which GTE Information Systems claimed all of its $207m revenue for fiscal 1998, account for 70% of DynCorp’s sales. The acquisition, which is expected to close within the next 30 to 60 days, would increase DynCorp’s annual sales to $1.7bn. Most of GTE Information System’s 925 employees are based at the company’s headquarters in Chantilly, Virginia, near to DynCorp’s base.
DynCorp is wholly owned by its 16,000 employees who staged a buy- out to take the company private in 1988. It has been seen as a good candidate to float on one of the US stock markets and a spokesperson told ComputerWire that the purchase … helps us to position ourselves to look at going public … it’s definitely on the radar screen.
