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Veritas Capital to acquire outsourcing company

The New York-based firm will add to its government outsourcing platform with this $600m transaction.

New York-based private equity firm Veritas Capital Partners has agreed to buy Arlington, Virgina-based Pearson Government Solutions, an outsourcing company, from Pearson plc, an international media and education company based in New York and London, for $600 million (€454 million), Pearson Government Solutions said in a statement.

Following completion of the transaction, Pearson plc will maintain a minority interest in Pearson Government Solutions, which will change its name but remain in Arlington, the statement said. The deal is expected to close early next year.

Pearson Government Solutions has approximately 5,500 employees in the US, the UK, Canada, Mexico, Argentina and Venezuela designing and operating information, benefits and services solutions, the statement said. The company’s clients include national and local governments, educational institutions and large corporations throughout the world, the statement said. Specifically, it has worked for the US Departments of Defense, Education, Health, Justice and Labor, as well as the London borough of Southwark. Recently, the statement said, the company renewed two of its largest contracts: The US Department of Education’s Federal Student Aid contract and the US Department of Health and Human Services’ Medicare and Medicaid Services contract.

“We are committed to the organizations vision and growth plans, which include expanding its presence geographically and in the vertical, high-potential markets, such as healthcare and business process outsourcing,” Robert McKeon, the president and founder of Veritas Capital, said in the statement.

Pearson plc has global businesses in the education, business information and consumer publishing sectors, the statement said. Its education branch, Pearson Education, produces print and digital learning materials to students. The company’s business section, The Financial Times Group, maintains business and financial newspapers and online information services, the statement said. Its consumer publishing group, Penguin, produces fiction and non-fiction books, children’s titles, and illustrated reference books in approximately 100 countries.

Fourteen-year-old Veritas focuses on companies that provide outsourcing services to clients in the defense and aerospace, security and infrastructure sectors. The firm’s  portfolio companies include McNeil Technologies, which provides language translation, security, document management and business process outsourcing services to the US military and other government agencies that focus on homeland security, intelligence and law enforcement, as well as ViStar, a provider of enterprise resource planning management, human resources consulting services and business process outsourcing, according to Vertias’s website.

Veritas bought DynCorp International, a company that provides outsourced technical services to civilian agenciesl, military groups and commercial customers. DynCorp’s clients include the US Department of Defense and the United Nations, from Computer Sciences Corp for $850 million in December 2004.