ICF to acquire McLean cloud technology firm, its second acquisition in two months

ICF International Inc. (NASDAQ: ICFI) is continuing to shop through the mergers and acquisitions market, with a deal to purchase information technology firm Creative Systems and Consulting. 

The agreement, announced Monday after market close, comes a month after the Fairfax consulting firm bought Rockville health information technology firm Enterprise Science and Computing Inc. (ESAC). Much like with that deal, terms of the Creative Systems acquisition were not disclosed. 

Creative will not only provide ICF with one of largest women-owned businesses in Greater Washington, it also secures for the company key offerings in the IT modernization and digital transformation fields, as well as a portfolio of federal clients hungry for them. The acquisition is expected to close by the end of the year. 

ICF CEO John Wasson said in a phone interview that one of the clear benefits that Creative brings is its expertise in low-code/no-code capabilities, in which developers construct tools modularly for more efficient development and easier connections to other applications, instead of using more extensive code design.

Creative brings a staff of roughly 270 employees that will provide ICF experience in cloud-backed low-code/no-code software platforms provided by Microsoft Corp. (NASDAQ: MSFT), Salesforce.com Inc. (NYSE: CRM) and ServiceNow Inc. (NYSE: NOW). Creative has worked on more than 200 federal cloud and infrastructure projects and has contracts with the departments of Agriculture, Treasury, Health and Human Services and a host of other federal agencies.

“I think we are seeing significant growth opportunities around these low-code/no-code platforms. Certainly, the government, as they modernize their systems are shifting onto these platforms," Wasson said. "I think the federal government is still in the third or fourth inning of its efforts to modernize these systems, so I think this is going to be a long-term effort on behalf of the federal government.”

Wasson said that Creative will likely generate $60 million in revenue in 2021 — up from $42.84 million in 2020, according to Washington Business Journal research — and is expected to maintain a revenue growth rate in the mid-teens next year, which would make it slightly accretive to ICF’s forecasted earnings per share in 2022. ICF reported $394.1 million in revenue for its third quarter and $1.16 billion year-to-date. 

Creative will be merged under ICF's umbrella with Incentive Technology Group LLC (ITG), which ICF acquired in January 2020 for $255 million, Wasson added. Creative's owners have indicated that they will stay on “for a period of time” as the two companies work on their integration, he said. 

Creative was founded as a cloud-tech firm in 2010 by CEO Vanitha Khera and President Vishal Khera. The company now has more than 900 technical and platform certifications, including 300 in Salesforce with whom it has the highest partnership level, Summit. Creative appeared on the Inc. 5000 in 2015, on Washington Business Journal's list of Fastest Growing Companies in 2017 and 2018, and on Washington Business Journal's Top-Performing Small Technology companies in 2020.

Wasson said while he expects that ICF will take a look at Creative's real estate footprint, he doesn’t have any specific plans to alter it at this time. Creative's headquarters offices are at 8281 Greensboro Drive in McLean.

The acquisition has marked a busy fall for ICF, which made the ESAC purchase and may still have more M&A on the horizon, the CEO said.

“Acquisitions will remain a key part of our strategy and really one of the key growth drivers for us in federal IT modernization and public health and health IT,” Wasson said. “We also have significant commercial energy practice and we continue to look for opportunities on the M&A side there.”

RW Baird & Co. advised Creative on the acquisition, while ICF’s corporate development team managed its portion of the transaction.