Smartronix: ‘Acquisitive’ With A Strong Balance Sheet

‘We’re going to be sharply focused on those businesses that offer us opportunities for deeper relationships with clients and, in particular, in application refactoring and transformation,’ CEO Peter LaMontagne says.

After purchasing two companies and welcoming an influx of new senior executives this year, Smartronix remains acquisitive and sharply focused on the nexus of national security and digital transformation, according to CEO Peter LaMontagne.

The Hollywood, Md.-based solutions provider, which specializes in next-generation cloud, C5ISR national security work, and advanced engineering and IT solutions, was further buoyed last month by recognition in another Gartner Magic Quadrant report and its selection as an awardee for portions of the multi-billion-dollar, U.S. Department of Defense-sponsored ASTRO contract for products and services related to unmanned/manned platforms and robotics.

The public sector accounts for a majority of Smartronix’s work, which is weighted toward its federal government national security business. Smartronix’s revenue exceeded $559 million last year, and it’s on track to eclipse that performance.

“Around three-quarters of our work is public sector, but our commercial clients are expanding very rapidly, and we are going to be building out both capabilities from a go-to-market and sales investment perspective,” LaMontagne said.

Following a December 2019 recapitalization when New York private equity firm OceanSound Partners invested in Smartronix, the 26-year-old company’s balance sheet is strong, according to LaMontagne.

“We have access to capital, both in the form of debt as well as additional equity investments, as needed,” he said. “It does enable and empower us to make good, long-term strategic decisions for the business. That involves both investing in the current team, which is very strong, as well as acquiring new businesses, as they come up strategically.”

OceanSound, which gained a controlling interest in Smartronix, subsequently combined it with Trident, its Huntsville, Ala., solutions provider catering to the federal government. Smartronix grew further in May, when it acquired C2S Consulting Group, a Herndon, Va.-based cloud solution provider specializing in the transformation of government customers in data-intensive environments. That deal followed its January acquisition of Datastrong, a Fairfax, Va., company with a focus on data architecture, design and business analytics for government and commercial clients. Terms of both deals were not disclosed.

“C2S is a business that is pure-play cloud solutions,” LaMontagne said. “They deepened our cloud capabilities… especially as it relates to multi-cloud and also application development. The second core attractive aspect of the C2S acquisition was access to new clients in the national security space, in particular clients with the (U.S.) Department of Homeland Security and also the intelligence community. These are areas where we had only toeholds, and with C2S, it provided us full positions in these key, fast-growing client spaces.”

Smartronix has a very active corporate development program and at any given time is evaluating and meeting with one to three target companies per month, according to LaMontagne.

“We do intend to be acquisitive, and our focus is going to continue to be on what our clients need most,” he said. “What we see in the coming quarters and years is an increased focus on the ability to not just migrate workloads and data, but to move applications and to transform applications, and to take advantage of cloud-native solutions that are inherent in the cloud platforms. We’re going to be sharply focused on those businesses that offer us opportunities for deeper relationships with clients and, in particular, in application refactoring and transformation.”

LaMontagne joined Smartronix as its CEO in July 2020 after leading the former Quantum Spatial, a geospatial analytics firm acquired by NV5 Global in late 2019.

Smartronix, which has more 1,000 consultants and technical staff, goes to market with three core capabilities. Its C5ISR (command, control, computers, communications, cyber, intelligence, surveillance and reconnaissance) work supports the federal government in the collection and processing of disparate data sets to aid decisions in the context of national security. Smartronix’s other core capabilities are engineering and IT modernization for federal government clients, and its cloud solutions business.

“The federal government and, in particular, the national security community, has been a cautious and thoughtful cloud adopter because of the highly regulated and controlled nature of their environments, their data sets and their applications,” LaMontagne said. “Now what we’re seeing is a steepening adoption curve of all three cloud solution providers, Amazon, Azure and Google. There’s an opportunity to support these clients with digital transformation strategies, and at the heart of those…strategies, of course, is the implementation of cloud-native solutions, whether those are private controlled clouds or full capabilities housed in the public cloud but secured appropriately.”

An Amazon Web Services Premiere Consulting Partner, Microsoft Gold Partner and Google Cloud Premiere Partner, Smartronix established a Cloud Center of Excellence in January.

“Our cloud solutions business is Gartner Magic Quadrant-recognized,” LaMontagne said. “It’s one of the fastest growing parts of our business. We have a significant number of commercial clients precisely because we grew up working with higher-level security systems and the need to protect cloud environments. We often support regulated commercial industries as well in financial services, insurance, etc., because these clients recognize our expertise with the federal government, where workloads need to be protected. It gives us great credibility in the commercial market.”

Research firm Gartner named Smartronix a “Visionary” in its 2021 Magic Quadrant for Public Cloud IT Transformation Services report in August. Gartner describes the Magic Quadrant Visionaries as providers that are well-positioned for the future, but could improve or scale their delivery capabilities. Gartner cited Smartronix’s approximately 65 percent growth in revenue for its public cloud services included in the report in addition to its multi-cloud support, cloud-native strengths and approximately 100 cloud-native/agile applications engagements last year with a DevOps-style of delivery .

“Smartronix is in the vanguard of providers delivering end-to-end cloud-native solutions, as evidenced by its SRE (sire reliability engineering), DevOps, app development and modernization practices combined with agile delivery,” the Gartner report stated. “Automation is a core tenet of the Smartronix strategy, with investments in AIOps designed to deliver more resilient and autonomous cloud operations.”