M&A Report: Private equity firm acquires government tech solutions provider

G.F. Gay Le Breton And Alex Rooney, Chaffe & Associates Inc. // June 12, 2024

https://bit.ly/Chaffe-CB-May24

Continuing its extensive run of acquisitions over the past two years, Baton Rouge-based private equity firm Bernhard Capital Partners(“BCP”) has acquired government tech solutions provider Apogee Engineering LLC.

Financials terms of the deal were not disclosed.

Based in Colorado Springs, Apogee delivers critical solutions to meet the increasing program management, technology integration and modernization, and cybersecurity needs of the U.S. government. The company offers an array of services focused on its four core competencies – digital transformation, science and technology, adaptive acquisition, and program management.

Apogee received approximately $67.5 million in unclassified prime obligations over the trailing 12 months, according to USASpending.gov data. Substantially all of that spend goes through contracts with the General Services Administration and the Defense Department.

This acquisition will be an addition to BCP’s dedicated government services platform, begun in 2023 with its acquisition of Duotech Services. The platform brings together complementary businesses with a shared goal to improve the efficiency, reliability, cybersecurity, and modernization of physical and technological platforms utilized by government personnel around the world.

“Apogee serves at the cutting edge of both terrestrial and space-based technology acquisition and will strengthen the capabilities of our growing national platform to meet government clients’ evolving needs,” said BCP government services platform Chairman Brian Ferraioli.

So far in 2024, BCP acquired Strategic Management Solutions LLC, which provides management, technical and engineering services to U.S. Government and industrial clients, and its affiliate, Delta Utilities, acquired CenterPoint Energy’s Louisiana and Mississippi natural gas distribution operations.  In the past 29 months, BCP and its portfolio companies have announced 29 deals.  BCP has $3.6 billion in gross assets under management.

Also in May, a New Orleans-based health care Software-as-a-Service business received a round of funding from multiple investors. Watershed Health (“Watershed”) received a $13.6 million investment from a group of investors, including Clayton Associates, Capstar Partners, MassMutual Ventures, and Launchpad Digital Health, among others.

Watershed Health seeks to solve a roughly $340 billion annual problem that the United States’ healthcare system faces: disconnected care. Failure to coordinate between healthcare providers has been identified as a tragically expensive and dangerous issue, causing errors, duplication of efforts, wasted resources, delayed solutions, among other problems.

Watershed Health was founded in 2013 by Dr. Chip Grant to work toward solving this issue. By providing healthcare providers with real-time information about patients, including health status, socioeconomic factors which can shape health, location, and care team details, patients are able to be treated by more readily-prepared professionals.

Dr. Grant notes that this technology does not compete with EHRs, information exchanges, and the like—rather, it complements them and helps them operate more robustly.  Because Watershed partners directly with health plans, the technology is typically provided at no cost to community providers.

Watershed presently partners with seven health plans, four of which have a national presence and thousands of clinical and non-clinical providers.  The investment will assist the company to scale operations and deploy the platform to new regions while growing its team of skilled professionals.

Finally, another Louisiana homegrown technology company found a new owner.  LSB Software, creator of the Check mobile app, was acquired by Caribou Apps of Syracuse, NY.  Financial terms of the deal were not disclosed.

Check is a payment and business management app tailored to landscaping owner-operators, supporting small businesses by offering back-office support functions, as well as operational solutions. Caribou Apps operates a landscaping and outdoor services app called Plowz & Mowz which allows homeowners to find landscaping providers near them.

Plowz & Mowz recognized that the landscaping industry, which reportedly is composed 75% of owner-operators, was struggling with payment solutions, leaving an opportunity for them to offer an end-to-end solution for landscapers.  “Our powerful all-in-one suite integrates robust business management and payment tools, including credit card processing, from Check, with our instant-job marketplace,” stated Plowz & Mowz Co-Founder Wills Mahoney.

LSB Software was founded by Matthew Armstrong and Jacob Jolibois in 2018 as a solution to utilizing the gig economy to help clean up blighted properties around Baton Rouge. Initially launched as Block Lawncare, the duo was able to take the winner’s medal at the Louisiana Technology Park’s PitchBR competition in 2019.

G.F. Gay Le Breton is managing director for Chaffe & Associates Inc., responsible for the corporate finance activities of the firm. Alex Rooney is a corporate finance analyst with the firm. Investment banking services are provided by Chaffe Securities Inc., member FINRA/SIPC. For more information, visit https://chaffe-associates.com.