BTG goes back to its roots with Stac

BTG Inc.'s plan to buy Stac Inc. in a $6.9 million deal marks the company's first acquisition since selling off its reseller business last winter and represents a renewed bid to strengthen its core technical capabilities.

BTG last month said it would purchase all the common stock of Stac, an employee-owned company that specializes in analytical services for solving complex problems and developing software tools that enable that analysis.

The deal is expected to be finalized in November, just less than a year after mounting losses prompted the company to sell its reseller business to Government Technology Services Inc. in an effort to focus on its traditional services market.

Stac is "right down the heart of what our mainstream business has been for the last 16 years: intelligence and high-end services," said Edward H. Bersoff, president and chief executive officer of BTG.

Stac, which has 65 employees, is expected to have about $10 million in revenue in its current fiscal year, which ends Dec. 31. Stac stood for Scientific and Technical Analysis Corp. when the company was founded in 1984, said Alan Jackson, president and CEO of Stac.

BTG and Stac— whose headquarters is located across the street from BTG's in Fairfax, Va.— have cooperated on intelligence projects in recent years, Jackson said.

Their joint efforts include a $20 million contract awarded this year by the Joint Signal Intelligence Simulation System Program to provide simulation designed to train tactical users and commanders how to best deploy and use signal intelligence assets, Jackson said.

Tom Browne, an analyst at Prudential Securities Inc., said the acquisition is small but significant for BTG because it shows things have settled down at the company after treading rough waters last year and because Stac has similar service lines.

"I think that's the message. BTG in the past made some acquisitions which weren't necessarily in its own strike zone," Browne said. "Here you're seeing more focus than in the past; that's a positive message."

The company also has done a substantial amount of work cleaning up its balance sheet, said John Graham, vice president of corporate affairs at BTG. Debt has been reduced from $115 million in November to $30 million today, Graham said.