RESTON, Va.; Oct. 25, 2007 -- Accenture (NYSE: ACN) has agreed to acquire Gestalt, LLC, a privately held defense consulting firm that provides mission-support services to the U.S. Department of Defense. Terms were not disclosed.
Gestalt, based in Camden, N.J., provides mission-critical command and control systems and solutions that help defense organizations achieve systems interoperability and collaboration, allowing information systems from separate branches of the armed services to share battlefield information in support of joint military operations. Gestalt also provides services related to modeling and simulation, advanced decision-support technologies, energy-management solutions, and tactical collaborative networks. Its clients include the U.S. Armed Forces, the Defense Information Security Agency, and regional power grid management organizations.
The acquisition will expand Accenture’s offerings in command and control systems, which are designed to help military commanders maintain situational awareness on the battlefield, develop military options and execute courses of action through constant data collection, processing and analysis. This segment of military operations is commonly referred to as C4ISR, which stands for Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance. Gestalt’s experience will support Accenture’s entry into the U.S. military market for command and control systems, which is estimated by Frost & Sullivan to grow to $29.4 billion by 2010.
"With this acquisition, we have expanded the range of capabilities that will enable our defense clients and their customers to achieve high performance," said Eric Stange, managing director of Accenture’s U.S. Defense practice. "Together, Accenture and Gestalt will provide the Defense Department with cross-domain skills in C4ISR that will enable our Armed Forces to fight smarter, respond more quickly and execute more efficiently."
Following the acquisition, Gestalt’s 250 employees will be offered positions with Accenture, and Gestalt CEO William Loftus will have a leadership role within Accenture’s Public Service operating group, as part of Accenture National Security Services LLC.
"Accenture and Gestalt are an excellent strategic fit in terms of their complementary skills and assets," said Gestalt CEO William Loftus. "The combination of Accenture’s breadth of resources and capabilities with our key offerings will result in an unparalleled suite of mission-support capabilities."
The acquisition is subject to customary closing conditions and is expected to close within 60 days.
Accenture National Security Services LLC is a wholly owned subsidiary of Accenture LLP, the U.S.-based business of Accenture, and delivers innovative solutions to the U.S. government defense and classified markets. Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills and technologies to help clients improve their performance. With approximately 170,000 people in 49 countries, the company generated net revenues of US $19.70 billion for the fiscal year ended Aug. 31, 2007. Its home page is www.accenture.com.
Except for the historical information and discussions contained herein, statements in this news release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied. These include, without limitation, risks that: Accenture and Gestalt will not be able to close the transaction in the time period anticipated, or at all, which is dependent on the parties’ ability to satisfy certain closing conditions; the transaction might not achieve the anticipated benefits for Accenture; our business could be negatively affected if we cannot expand and develop our services and solutions in response to changes in technology and client demand; the management consulting, systems integration and technology and outsourcing markets are highly competitive and we might not be able to compete effectively; our business could be negatively affected by economic and political conditions and the effects of these conditions on our clients’ business and levels of business activity; our work with government clients exposes us to additional risks in the government contracting process; clients may not be satisfied with our services; our business could be negatively affected by legal liability that results from our providing solutions or services; our results could be adversely affected if our clients terminate their contracts with us on short notice; our outsourcing services subject us to operational and financial risk; liabilities could arise if our subcontractors or other third parties cannot deliver their project contributions on time or at all; our results of operations may be adversely affected by the type and level of technology spending by our clients; our profitability may suffer if we are not able to maintain favorable pricing rates and utilization rates, if we cannot control our costs, or if we cannot anticipate the cost and complexity of performing our work; our global operations are subject to complex risks, some of which might be beyond our control; our growth and our ability to compete may be adversely affected if we cannot attract, retain and motivate our employees or efficiently utilize their skills, including those personnel currently employed by Gestalt; our business may be adversely affected if we cannot manage the organizational challenges associated with the size and expansion of our company; as well as the risks, uncertainties and other factors discussed under the "Risk Factors" heading in our most recent annual report on Form 10-K and other documents filed with or furnished to the Securities and Exchange Commission. Statements in this press release speak only as of the date they were made, and Accenture undertakes no duty to update any forward-looking statements made in this news release or to conform such statements to actual results or changes in Accenture’s expectations.
Peter Y. Soh
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