- The Washington Times - Thursday, April 24, 2003

Anteon International Corp., a Fairfax information-technology company, said yesterday it would buy an Annandale maker of optical security cards for the State Department.
The purchase, if approved by regulators and shareholders, would allow Anteon International Corp. to ramp up its homeland-security business.
Anteon will pay $90.7 million in cash for Information Spectrum Inc. (ISI) and all of its stock, which will leave ISI with no outstanding debt by the deal's close.
ISI is a privately held company focusing on intelligence and homeland-security services. It has more than 1,200 employees and 27 offices nationwide.
The buyout is part of Anteon's goal to bid for a contract from the Homeland Security Department to provide identification-security cards with optical storage and integrated circuits, said Mark Heilman, executive vice president for corporate development.
"ISI is unique in that it is the only company making optical cards for the U.S. government. We're hoping to combine those technologies with our own integrated-circuits technology to win the contract."
The contract could be worth hundreds of millions of dollars over 10 years, though the exact amount was not disclosed.
For fiscal 2002, ISI earned $8.8 million on $130.5 million in revenue.
The company would become a subsidiary of Anteon by the end of May. Mark Green, ISI's president and chief executive officer, would head Anteon's business unit, Mr. Heilman said.
Mr. Green did not return calls for comment.
It's the first acquisition for Anteon since the company became publicly held in March 2002.
Anteon's stock shot up to a high of $24.07 yesterday before closing at $23.70 on the New York Stock Exchange, up 30 cents from Tuesday's close at $23.40.
Mr. Heilman expects the acquisition to add 4 cents per share to the company's 2003 net income, raising it to $1.08.
In the fourth quarter of 2002, Anteon posted a loss of $3 million (13 cents) compared with profits of $8.6 million (25 cents) a year earlier.
Several analysts said the purchase fit with Anteon's strategy.
"It makes sense that the company would want to buy ISI and become a big player in the arena of federal [information-technology] services," said Cynthia Houlton, a senior research analyst at RBC Capital Markets.
Tim Quillin, research analyst at Stephens Inc., said he expected the acquisition to improve the new unit's profit margin and increase Anteon's presence in homeland-security contracts.
"One thing Anteon is good at doing is strategically buying a company and raising that company's lower margin within the first couple of years," Mr. Quillin said.
Anteon has bought six companies since its formation in 1996.

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