M&A: Octo to merge with Sevatec, expand Federal capabilities and solutions

“Octo, a premier provider of emerging technology and IT modernization services for the Federal Government, announced today its combination with privately held, Fairfax-based Sevatec, a leading provider of mission-critical software development solutions and digital modernization services to the Federal Government. The combination of Octo and Sevatec creates a highly agile partner to government customers that can address complex technology challenges with innovation, high-touch service, and substantial technical and operational resources.”

“The combined organization has grown every year since inception and today generates nearly $300 million in revenue and employs approximately 1,100 skilled employees dedicated to solving technical challenges for government customers across the Defense, Intelligence, National Security, Federal Health, and Civilian marketplaces.”

“Founded in 2003, Sevatec drives advancements in technology, open-source tooling, commercial best practices in human-centered design, Agile delivery, DevSecOps, end-to-end security, cloud service integration, data engineering, and automation. With almost $400 million in recent prime Digital Modernization contract wins, highly strategic contract vehicles, and differentiating technologies such as ShiftUp™, Sevatec has solid momentum in key markets and creates complementary expansion opportunities for the combined business to pursue…”

“… Sevatec’s core leadership team will play leadership roles in the combined business. As part of the transaction, Sonny Kakar will serve as Vice Chair of the Board and Head of Strategy while Tim May, Sevatec’s Chief Growth Officer, will serve as the Chief Growth Officer for the combined organization, a position that was previously unfilled at Octo. Furthermore, Chuck Schefer, EVP at Sevatec, will serve as EVP managing programs in the GSA, DHS, and USPTO markets, among others. Mehul Sanghani will continue to serve as the combined firm’s CEO.”

“The combined firm will include market-leading proprietary solutions and branded intellectual property covering the full modernization spectrum from DevSecOps (ShiftUp™) to Agile Software Engineering (Javana) to Open Source Software Development (Octo CX), to Artificial Intelligence and Blockchain solutions, all managed and enhanced within Octo’s oLabs™ R&D facility.”

“The combined firm will also include an unparalleled depth of large-scale modernization qualifications and experience across the entire federal space with franchise positions in several agencies. Agencies benefitting from the combined companies’ efforts include major modernization programs within the Intelligence Community at the National Geospatial Intelligence Agency (NGA); within National Security on transformational programs across the Department of Homeland Security (DHS); and at modern software factories being stood up within the DoD such as the Air Force’s Kessel Run program. Octo and Sevatec also have major roles at Health & Human Services (HHS) on projects across the National Institutes of Health (NIH) and major modernization programs at Civilian agencies like the General Services Administration (GSA), Department of Transportation (DoT), and Patent & Trademark Office (USPTO).”

“With this transaction, I firmly believe we have created a unique, market-shaping organization that is unmatched in terms of its collective ability to be a pure-play modernization and technology solutions provider to the Federal Government and its wide-ranging missions,” said Mehul Sanghani, Octo’s Founder and CEO. “I truly believe no other firm in the federal market can boast a combined culture of innovation and a combined talent base of high-end engineers with expertise in Agile/DevSecOps, open-source software development, cloud engineering, cyber, and artificial intelligence. More importantly, very few federal technology providers can cite large scale modernization success across the end-to-end breadth of mission systems we do collectively – from the Intelligence Community to Health Care Agencies to Defense Systems to National Security and Civilian missions, our breadth of modernization support covers the gamut.” …”

Read the full press release here.

G2X TAKE: The news out this morning that these two highly successful and fast-growing Federal emerging technology and IT modernization services leaders are merging is certain to create plenty of conversation between firms around the beltway as they analyze how this combined entity will compete and when and where they should be viewed as a partner and/or a competitor. 

The snapshot below details top ten Federal agencies where this duo has secured Prime contract awards from 2015-2019. Note: this is only the top 10 and it does not take into consideration the many JVs these groups are involved with. 

 

Federal contracting data provided to G2Xchange by Federal Compass; Date: December 2020

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