• Enlightenment Capital Forms Another Government Tech Platform

    January 22, 2019  |  by Robert J. Terry

    Chevy Chase-based aerospace and defense investment firm Enlightenment Capital has taken a stake in a Chantilly security engineering company.

    System High Corp. becomes the initial investment of a new Enlightenment platform, according to Partner Jason Rigoli, straddling the defense, intelligence and commercial markets for cybersecurity and information assurance technology.

    Terms of the investment weren’t disclosed.

    This is the second platform Enlightenment has bankrolled in the last four months, following its formation in October of a new government services company called EverWatch.

    System High was launched in 2005 by Kirk Blubaugh and four other partners, with the National Reconnaissance Office as its primary customer. The company grew to 200 employees by 2015 thanks in part to a big contract win four years prior from the Defense Advanced Research Projects Agency.

    System High President Rob Howe was named CEO, while Blubaugh will take a seat on the company’s board and remain a shareholder and adviser. The company ranks 44th on our most recent list of the largest government technology contractors in the region.

    “System High sits at the critical intersection of defense innovation and IP protection,” Enlightenment Capital Managing Partner Devin Talbott said in a statement. “We plan to support management and invest in the company’s continued momentum — both organically and through M&A.”

    Enlightenment, formed in 2012, has raised $427 million across three funds, including $200 million last year. The firm’s success raising money underscores the appetite for investment in aerospace, defense and government services companies as Pentagon budgets surge and federal agencies undertake sweeping IT modernization initiatives.

    Enlightenment Capital usually invests as a noncontrol partner with hybrid debt-equity financings for middle-market companies — typically $10 million to $50 million invested in companies with revenue of $30 million to $250 million.

    With its EverWatch platform, Enlightenment is instead controlling the company, which was formed after Ashburn-based IEA Corp. was combined with ACES Inc. (headquartered in Columbia, Maryland) and two other companies Talbott declined to reveal.

    In November, EverWatch acquired Dynamic Engineering Solutions, which provides cloud and network administration services to the intelligence community.