Privately held Bethesda, Maryland-based Zen offers systems engineering, consulting, and network services to the government. The company’s clients include The Missile Defense Agency, the Federal Communications Commission and the Federal Trade Commission. Zen has about 275 employees and pulled in some $38m in revenue for a $6.0m operating profit over the twelve months ended November 30, 2005.
The handsome price tag for Zen – more than 50% higher than its annual revenue rate – suggests that the deal could indeed give SI some lucrative federal work. About 60% of Zen’s business comes from the Pentagon, and 80% of its total revenue comes from prime contracts.
Additionally, approximately half of Zen employees hold security clearances at the secret level or above, which is important in winning contracts from the growing pool of defense, intelligence, and homeland security spending.
The deal is expected to close by the end of the current quarter and should be immediately accretive to SI’s earnings.