Colorado Springs-based defense contractor Intelligent Software Solutions recently announced its merger with two East Coast defense contractors to create a new company: Polaris Alpha.

The combined firms already employ more than 1,000 people and anticipate revenue to equal more than $250 million by next year.

ISS merged with Proteus Technologies, based in Maryland, and EOIR Technologies, based in Virginia, thanks to acquisitions by private equity firm Arlington Capital Partners. The goal is to create a technology, software and solutions provider for defense and intelligence agency customers. Arlington, formed in 1999, has a “buy-and-build” philosophy that seeks to invest in companies doing business with the federal government, according to its website. The company has invested $2.2 billion in more than a dozen companies in the health care, technology, and aerospace and defense sectors.

The deal has been in the works for two years and represents an entirely new direction for ISS, CEO Jay Jesse said.

“It’s setting us up for the next phase of who we are. ISS has grown organically over the years, but has never done something on this scale,” he said. “We’ve been in business for 19 years and are status quo in how we do operations, so this is a big step for us.”

Arlington did not disclose the financial terms of the merger.

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“Polaris will fill the void between niche players and prime contractors to deliver agile, sophisticated solutions to a growing number of government customers disillusioned with the traditional options available to them,” said Michael Lustbader, managing partner at Arlington Capital, in the press release. “Polaris is a byproduct of the infusion of innovation into the national security sector and is contractually well-positioned to capitalize on this market opportunity.”

All three companies bring specific expertise to the merger. Proteus focuses on cybersecurity, engineering, intelligence and research for the defense sector. It recently received a $25 million contract to provide cybersecurity services to the Department of Defense. EOIR provides expertise in intelligence, surveillance and reconnaissance, as well as engineering solutions, data analysis, cloud computing, rapid prototypes and training, according to its website. It’s most recent prime contract was a $249 million intelligence contract with the U.S. Army Research Laboratory to provide technology integration services.

In Colorado Springs, the main focus of ISS is “data visualization, event analysis, pattern detection, mission planning, and mobile software using net-centric and enterprise architectures,” according to its website. The local firm was named to the Deloitte Fast 50 for tech companies in Colorado and to the firm’s Fast 500 list for the nation. It was a Business Journal “Best Defense Company” award winner and was named to Inc. Magazine’s Top 100 Colorado companies. Its most recent award is a $36.8 million contract with the U.S. Air Force as part of its Air Space Precision Engagement Research and Engineering program.

The new company

EOIR CEO Pete Cannito will serve as Polaris Alpha’s CEO, and Jesse will act as president. The company will have joint headquarters in both Colorado Springs and Fredericksburg, Va. Its new website is polarisalpha.com.

“[The Colorado Springs location is] probably the biggest individual facility in the company, so it’s certainty a center of gravity here, and the plan is to continue that,” Jesse said.

Each section of Polaris is running its own recruiting and hiring processes. However, in the next few weeks, the three firms will be teaming up, gathering resumés and forming Polaris into a single entity, Jesse said.

HIRING

“We’re hiring in the Springs, on the East Coast and in Albuquerque,” he said. “It’s an exciting high-tech company with some critical mass to be a real player in this area.”

During the next 12 months, the firm will hire between 50 and 100 people in Colorado Springs, he said.

While all companies hold prime contracts with the federal government, the hope is the combination will allow them to benefit from each other’s contract vehicles, strengths and combined customer expertise, Jesse said.

“What ISS brings to the merger is a good leadership team, excellent technology and fast performance, particularly in the Air Force and related fields,” he said.

EOIL is similar to ISS in size — but its expertise is in the Army space, Jesse said.

“When you add Proteus to the mix, an intelligence community leader, it gives the whole company a diverse, broad-based set of customers that I think customers themselves will be excited to see what else their contractor can bring to the table,” he said.

Leadership will continue to look for additional acquisitions to meet strategic organic and inorganic growth goals, Jesse said.

“With the merger, I’m looking forward to growth opportunities, opportunities to learn new things, new customers and career growth for employees,” he said. “We’re going to be able to work in a bigger space, and I think we will become the preeminent mid-tier defense contractor.”

Priorities

Polaris Alpha’s focus is to lead the way in next-generation national security solutions — addressing customers’ most complex challenges across air, land, sea, cyber and space domains, according to its website.

Cannito said his top priority leading the merger is to execute a smooth transition and thoughtful integration of the companies so it disrupt their ongoing successes, yet capitalizes on the meaningful synergies across the entire organization.

“The challenge of merging three highly successful companies is ensuring that we don’t inadvertently adversely affect any of the attributes that led to their success in the first place,” he said. “We are being thoughtful and deliberate in our planning to make sure we carry forward the historical success factors into the combined organization.”