L-1 Identity Buys Intelligence Services Firm

It will pay $66 million for McClendon.
Publish date:

IT security company

L-1 Identity Solutions


will buy privately held


, a provider of technical and professional services to the intelligence and military communities, for $66 million.

L-1 Identity will pay McClendon shareholders $33 million in cash and $33 million in equity.

McClendon has more than 200 employees, with more than 90% holding top secret security clearance, said L-1. Including McClendon employees, L-1 expects to have about 850 individuals with high-level government security clearance by the end of the year.

The transaction is expected to close in July and is likely to add $20 million of revenue and to

add to earnings.

Shares of L-1 were down 27 cents, or 1.3%, to $20.08 in recent trading. The stock is up nearly 32% this year.

Chantilly, Va.-based McClendon counts the National Geospatial-Intelligence Agency, National Security Agency and the Federal Bureau of Investigation among its customers.

McClendon, with its expertise in imagery intelligence, all-source intelligence analysis and systems engineering, is "highly complementary" to L-1 Identity's existing and prospective businesses, said L-1.

The latest acquisition would also strengthen the company's recent purchase of Advanced Concepts, said L-1.

L-1's acquisition of ACI was announced in May and is expected to close in July.

McClendon's revenue has grown about 33% from 2003 to 2006, and the company will have no debt outstanding at closing, said L-1.

L-1 expects McClendon's future growth to be consistent with the L-1 model of approximately 20% annual organic growth. McClendon had a total estimated backlog of $98 million as of Feb. 28, said L-1.