Applied Signal Technology, Inc. [APSG] on Wednesday said it has acquired Seismic LLC, a small cyber security solutions provider serving the Defense Department and intelligence community, in a deal that it believes puts it in the top 10 firms providing network security in the intelligence arena.
AST paid $25 million for Maryland-based Seismic, and the deal includes a $5 million earn-out provision. Seismic, which has about 100 employees, had $15 million in sales last year and is expected to grow between 20 and 30 percent this year.
“We believe that the current urgent need for cyber intelligence services will continue to expand into the future,” William Van Vleet, AST’s CEO, said in a statement. “The acquisition of Seismic, a fast growing, profitable, and extremely talented organization, cements our position in that exciting market. We now have the scale, thought leadership, and access to resources to be a significant competitor across a wide range of programs.”
Later, in a conference call with analysts to discuss the acquisition, Van Vleet said that with Seismic, “The total of our network intelligence business is probably around 220 people, and we believe that vaults us literally into the top 10 of the contractors, so this is a significant move. It moves us to that first tier.”
He also said that combined with AST’s existing work the deal positions it on six of the seven key cyber security contracts that have been let over the past two to three years.
Van Vleet cited market forecasts as saying that about $50 billion is expected to be spent on cyber security over the next five years.
AST provides advanced intelligence, surveillance, and reconnaissance products, systems and services to defense and intelligence customers.