Fairfax-based ICF to acquire cloud services provider for $255M

Fairfax-based consulting and technology services provider ICF International Inc. plans to acquire Arlington-based cloud services provider Incentive Technology Group LLC (ITG) for $255 million, ICF announced Tuesday.

The closing of the transaction is subject to approval and is expected to occur in the first quarter.

“IT modernization and cloud together is estimated to be approximately a $21 billion federal market and one in which ICF already has gained traction through organic expansion,” ICF President and CEO John Wasson said in a statement. “The 350-plus people at ITG are driving transformational solutions through the adoption of next generation technologies for federal government agencies. … We see significant revenue synergies by combining ICF’s domain expertise … with ITG.”

ITG was founded in 2010 and mainly works with federal government agency clients on cloud-based implementations and other IT services such as architecture and design of code pipelines. In 2019, ITG had approximately $90 million in revenue, and ended the year with a revenue run-rate in excess of $100 million.

“As one team, ICF and ITG bring highly complementary capabilities and will be uniquely positioned to architect and implement technology platforms that drive the strategic transformation agencies need to meet their new mandates,” ITG COO JC Chidiac said in a statement.

ICF expects to net a tax benefit of approximately $33 million from the acquisition. After the acquisition is complete, it’s expected that the company’s leverage ratio (proportion of debts to capital) will be less than 2.7%. If the acquisition is closed by the end of January, ICF expects its revenue to increase by roughly 10% in 2020 — its revenue was $1.48 billion in 2019.

ICF will provide formal 2020 guidance in its full-year 2019 earnings to be released on Feb. 27.

ICF was founded in 1969 and has more than 7,000 full-and part-time employees with offices in North America, Europe, Asia, Africa and the Middle East. In 2014, ICF acquired Olson, an integrated marketing technology and digital services provider, and in August 2019 announced that it would have a new headquarters in Reston in close proximity to Google Reston.