• Enlightenment Capital Forms Intelligence Contractor

    October 15, 2018  |  by Robert J. Terry

    Chevy Chase-based aerospace and defense investment firm Enlightenment Capital has formed a government services company, merging four entities together into a new platform called EverWatch.

    Ashburn-based EverWatch employs more than 400 serving customers in the defense and intelligence markets and is led by President Robert Miller. Enlightenment Capital plans to continue to invest in the platform, both organically and through M&A, said Managing Partner Devin Talbott.

    Miller has been president of IEA Corp. since 2015. Along with IEA, another company merging to form EverWatch is ACES Inc., headquartered in Columbia, Maryland, and with offices in Aurora, Colorado. ACES founder Jeb Pair is EverWatch’s chief innovation officer.

    Talbott declined to reveal the other two companies forming EverWatch, nor its revenue.

    IEA, also known as Ian Evan & Alexander Corp., ranked 32nd on the Washington Business Journal’s 2017 list of 50 fastest-growing companies in the region, reporting revenue of $44.7 million, up from $29.9 million the year before.

    EverWatch’s customers include the Office of the Undersecretary of Defense for Intelligence (OUSDI), the Air Force and the departments of State and Justice.

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

    With EverWatch, Enlightenment will control the company. This is similar to how other private equity investors operate, such as Arlington Capital Partners and Veritas Capital, by taking over management of their portfolio companies.

    Chevy Chase-based Arlington formed Polaris Alpha in June 2016 after acquiring EOIR Technologies of Fredericksburg, Virginia. In November of that year, it merged with Intelligent Software Solutions of Colorado Springs, Colorado, and Proteus Technologies of Annapolis Junction, Maryland. The result was a combined company with 1,100 employees and $250 million in annual revenue.

    Polaris Alpha was then acquired in May by engineering giant Parsons in a bid by the $3 billion California company to broaden its footprint in defense, space and intelligence. Arlington’s willingness to exit so far out in front of a typical three- to five-year hold period caught market watchers by surprise and underscored the vitality of the government services market.

    Enlightenment disclosed in an April Securities and Exchange Commission filing its plans to raise to $200 million for its third fund, bringing its total capital raised to $427 million.

    Enlightenment was launched by Talbott and Pierre Chao in 2012. It closed its first $80 million fund in 2014 and its second, totaling $147 million, in January 2017.

    The escalating size of the funds underscores the appetite for investment in aerospace, defense and government services companies as Pentagon budgets surge and federal agencies undertake sweeping IT modernization initiatives.

    Another Enlightenment portfolio company, Arlington-based ByteCubed, did the rebranding work for EverWatch via the D.C. creative agency it recently acquired, Chief. Enlightenment invested in ByteCubed in February.