While government bureaucracy makes most of us see red, Vangent saw dollar signs. The company planned, built, and operated technology systems mainly for the US government, which accounted for 90% of sales. Services included network design consulting, business process outsourcing, and systems integration. Its top clients were the Department of Health and Human Services, the Department of Commerce (DoC), and the Department of Education (DoEd). Vangent also served retail, education, and banking clients. The company was sold by former owner Veritas Capital to defense contractor General Dynamics for about $960 million in 2011; it was made a part of General Dynamics Information Technology, the IT arm of General Dynamics.
To cut costs and improve profits after a couple of loss-making years, Vangent began to sell underperforming operations in Latin America in late 2009. The disposition of these businesses continued into early 2011; discontinued operations were located in Argentina, Mexico, Puerto Rico, and Venezuela. Less than 10% of sales were made outside the US in 2010, with clients in the UK and Canada contributing the most to bottom line.
Meanwhile, the company used the $64.6 million acquisition of US-based IT services provider Buccanneer Computer Systems & Service in 2010 to increase its presence in the states of Maryland, Pennsylvania, and Virginia as it refocused on core government clients in the region.
The Buccanneer deal contributed to a 30% increase in total sales for Vangent in 2010 over 2009, and despite increased costs, Vangent turned a profit for the year after losing money in the previous three. Buccanneer's contracts with the Centers for Medicare and Medicaid Services in particular gave the company's government business a boost. Additionally, revenue from Vangent's contracts with the DoC and DoEd increased for the year as the company processed national census forms and took on additional contract work for the Office of Federal Student Aid. Sales from a contract with the Military Health System declined, however.
Vangent traced its roots back to a not-for-profit test scoring center, called the Measurement Research Center, that was founded at the University of Iowa in 1953 and developed the first electronic scoring machine. The company, which has at different times been a subsidiary of Westinghouse Electric and National Computer Systems, first started working with the US government in 1978, when it began a longstanding contractor relationship with the DoEd. – less