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Tresys Technology picked up by private-equity firm

By Marjorie Censer,January 20, 2013

Former Chairman of the Joint Chiefs of Staff, Peter Pace. (Alex Wong/GETTY IMAGES )

Seeking to expand its base of customers, Columbia-based cybersecurity company Tresys Technology agreed to sell itself to private equity firm Behrman Capital. Retired Marine Corps Gen. Peter Pace, who once held the nation’s highest-ranking military officer job and now works for Behrman, will become chairman of the company’s board.

Gary Latham, the chief executive of Tresys, will continue to run the company’s daily operations. He said the cybersecurity firm made a “conscious decision” to look for a partner and potential buyer.

Tresys was seeking “a company that had the appetite to support some additional investments to grow the business and also who had the kind of footprint and contacts and resources” that would benefit it, he said.

The 14-year-old company, which also has an office in Ashburn, was founded to focus on cybersecurity. It started with building security into operating system platforms, but then moved into software and applications, such as appliances that filter and inspect traffic. The company has also produced open source software.

Tresys primarily works with government agencies, but about 10 percent of its business is with companies in critical infrastructure industries, such as finance and energy.

Now, Tresys is hoping that its partnership with Behrman — the terms of the deal were not disclosed — will help it build out its customer base and infuse capital.

As part of the acquisition, Pace, former chairman of the Joint Chiefs of Staff, will assist Latham with strategy, serving as non-executive chairman.

“Tresys already has a very, very solid business model,” said Pace. “But as the environment gets worse ... Tresys is well-positioned to assist the country in defending itself against the attacks that are going to come.”

Behrman Capital, he added, will be able to provide funding Tresys may need to expand.

The private-equity firm “buys companies, it retains the leadership of the company, it helps those companies grow,” Pace said.

Behrman isn’t the first private-equity firm in recent years to throw its money behind government contractors, particularly ones in areas of increased interest like cybersecurity and intelligence.

Jason F. Rigoli, a managing director at private investment firm Monument Capital Group, which focuses on the security and defense sectors, said many private equity investors remain interested in the cybersecurity sector.

It’s “still an area where all boats are rising,” he said. But “because everybody’s looking, the valuations are extremely high.”

Still, he said he expects more private-equity deals in the sector in the coming months.

“Everyone’s still focused on it and just trying to find the right asset at the right price,” he said. “This will be the hottest sector in the federal space for the foreseeable future.”