The headquarters of Haverstick Consulting Inc., the Carmel-based defense-consulting firm acquired by Kratos Defense & Security Solutions Inc. of San Diego, will remain in Indianapolis, a company executive said this afternoon.
Haverstick, headed by Conseco founder Steve Hilbert, announced earlier today that it had agreed to be acquired by Kratos for $90 million, including $69 million in cash and $21 million in Kratos stock.
Howard Bates, president and CEO of Haverstick’s three divisions, said the company will remain in the Indianapolis area and become a wholly owned subsidiary of Kratos.
“Our leadership team will remain in Indianapolis, as will I,” Bates said. “We see our employee population growing in Indiana, not downsizing.”
Many of Haverstick’s 480 employees work at customer locations. Haverstick provides engineering, logistics, suborbital rockets and rocket launch support services. It also offers information technology, program management, and other professional services to government and the private sector.
Competing for federal contracts had become increasingly difficult for Haverstick, as it is no longer considered a small business for federal contracting purposes. Up against the likes of Boeing, Lockheed Martin and Northrop Grumman, it needed to get larger or risk losing business, Bates said.
Kratos is a small public company that seems to have a mix of business and customers to complement Haverstick’s, and will allow it to better compete in the federal market, he said.
Haverstick was not for sale, Bates said, but had been investigating several options to position the business to grow and compete, including additional acquisitions.
Kratos said the deal, which is expected to close late this month or in early December, will broaden its ability to garner larger contracts, particularly with the U.S. Air Force.
Haverstick executives met with Kratos’ president and CEO earlier in the year to gauge the company’s future.
“The more we looked at each other’s business and the strategic fit, the better each of us felt about joining forces,” Bates said. “This is truly a winning situation where both businesses are benefiting greatly from this combination, as well as our employees and customers.”
Haverstick subsidiaries are Haverstick Government Solutions, DTI and Associates and RSS Rocket Support Services.
Financial backers of Haverstick include Hilbert and Rollin Dick. Dick is a Haverstick consultant who will have a minority shareholder interest in Kratos.