Arlington Capital Partners has made another addition to its government contracting portfolio, acquiring McLean-based software consulting firm MCR LLC in a deal announced Tuesday.
Terms of the acquisition were not disclosed, but the purchase provides the Chevy Chase venture firm with access to in-demand software development, systems engineering and program management services across both the federal space and with NATO customers as well.
The transaction also includes partial investment from MCR’s senior management team, though it is unclear what the ownership split is. Executives from Arlington Capital Partners weren’t immediately available for comment when reached by phone.
Through its position on multiple General Services Administration contracts, MCR provides technology services to multiple defense, intelligence and federal civilian customers, including the departments of Defense, Energy, Homeland Security and Interior, in addition to agencies like NASA, the CIA, Air Force Research Laboratory and Missile Defense Agency.
While the company has been in the contracting market since 1977, MCR’s expertise in more emerging and increasingly popular software development capabilities like agile and DevOps — where software engineers, operations personnel and others collaboratively and iteratively develop applications — and its portfolio of customers in hot markets like space, missile defense and cybersecurity made them an attractive option for investment, said ACP Partner David Wodlinger, in a statement.
And this purchase, he said, could lead to more in the future.
“We are partnering with MCR to increase investment in these core areas, as well as to pursue strategic acquisitions to enhance and broaden the differentiated capabilities that MCR can bring to bear for its customers and to provide additional career opportunities for the company’s employees,” he said. “We see enormous demand in the market for MCR’s services and we believe that with our investment in the business, MCR is very well-positioned for the significant growth in front of it.”
Under ACP's umbrella, MCR could also grow its own footprint, including its management, analytics, talent recruitment and productivity software platforms for agencies. CEO Bill Parker said MCR has known Arlington Capital Partners "for many years," and this deal will help the contractor as it "enters its next phase of growth."
That was a key strategy for the company a decade ago, when it was looking to expand beyond its status as a middle-market company. Having just bought Falls Church consulting firm JB&A Inc. to serve as its intelligence programs division, then-CEO Neil Albert told the Washington Business Journal that the company was quickly trying to expand to compete against large primes like Booz Allen Hamilton Inc. (NYSE: BAH).
Soon after that, MCR ranked among Greater Washington's largest public companies, reporting $107 million in 2016 revenue and 400 total employees at the time, one-quarter of whom were based locally.
Sheppard Mullin served as legal adviser to ACP, while Houlihan Lokey served as financial adviser and Holland & Knight as legal adviser to MCR.
Arlington Capital Partners, founded in 1999, closed eight deals last year alone as one of the region's most active private equity firms, according to Washington Business Journal research. That follows the firm's closing in 2019 of its fifth fund, at $1.7 billion, priming the pump for a series of new acquisitions. Until then, it had counted upward of 90 buyouts, and its current portfolio includes Reston's Octo Consulting Group and Herndon's Tyto Athene.
