Mountain Lakes, New Jersey-based CHC is paying $21m up front for the privately-held company, and will pay an additional $10m over the next three years depending on RGII’s performance. CHC says that RGII’s revenue will immediately be accretive to its earnings. RGII’s revenue exceeded $33m over 2002, and the firm has excellent profitability, according to CHC.

The 350 person strong RGII was founded in 1990, and now supports over 80 government clients including the Department of State, the Office of the Secretary of Defense for Health Affairs (OSDHA), the U.S. Navy) and the National Oceanic and Atmospheric Administration (NOAA) in the Department of Commerce. Half of the company’s revenue comes from the public sector, and RGII is the prime contractor on more than 50% of its contracts, claims CHC.

RGII provides services and solutions covering enterprise management, network infrastructure, information assurance and security, web development and integration, program management, call management, engineering technology and technical services. In addition, RGII sells a proprietary software product known as Monument, which assists the Federal budget formulation processes.

Acquiring a platform company in the Federal government IT services marketplace has been a long-term priority for CHC, and we believe RGII is an outstanding fit for us. While most experts agree that the overall IT Services sector continues to face sluggish growth prospects as corporate technology budgets continue to be squeezed and offshore outsourcing of technology jobs continues, the Federal government IT sector remains a very strong market, said CHC president and CEO William Murphy in a statement.

CHC is itself the subject of takeover bid by Boston-based Aquent LLC. CHC is resisting the Aquent bid, though it was recently forced to cede two board positions to Aquent nominees.

John Chuang, Chairman and Chief Executive Officer of Aquent LLC, said in a statement, We believe that Computer Horizons has not released enough detailed information for us, or any other shareholder, to fully evaluate the impact of the transaction on the value of Computer Horizons. We remain interested in meeting with the newly constituted Computer Horizons Board and its advisors to discuss our merger proposal and better understand the RGII acquisition.

Source: Computerwire