US consulting firm ICF International buys peer Macro International for $155 million

US consulting company ICF International said today it has agreed to buy Washington, DC-based Macro International for some $155 million. The purchase is expected to be funded through ICF's existing bank credit line and to be completed within the next few days, subject to the customary closing conditions.

Fairfax-based ICF International said the transaction will boost its health market offering by adding Macro's contracts, relationships and experience in federal health-related programs to ICF's own human services and health-related I-T services.

Macro had revenue of $150 million last year, and ICF says its acquisition should give ICF revenue of between $645 million to $675 million in 2009. Further, ICF reaffirmed its expectation that core business organic growth will be more than 15 per cent compared to the prior year. Based upon planned investment spending in the acquisition in 2009, ICF is maintaining its EBITDA margin guidance for the year in the range of 9 per cent to 10 per cent.

Macro has 700 full-time employees in the Washington area working from the company's headquarters in Calverton, Maryland, as well as offices in Bethesda, Rockville and Silver Spring. The company provides research and evaluation, management consulting, marketing communications and information services to the federal government. Notable customers include the US government departments of Health and Human Services, State, Education and Veterans Affairs.

Macro was founded in 1966, acquired by Opinion Research Corporation in 1999, which was in turn acquired by infoGroup in 2006. infoGroup's CEO Bill Fairfield said, "While we feel ORC and the market research business has synergies with the remainder of the Company, Macro's focus on governmental social research is not a strategic fit for the Company's overall portfolio of businesses."

Regarding the acquisition, ICF's chairman and CEO Sudhakar Kesavan said, "This transaction illustrates an important element of ICF's growth strategy - to acquire profitable, high-quality firms that provide significant growth potential and cross-sell opportunities in our key markets."

infoGroup, in its statement, said it intends to use substantially all of the net proceeds from the transaction to reduce bank debt and strengthen its balance sheet.