Nexus to acquire IT integrator Linear

Thursday, March 1, 2007

ARLINGTON, Va.--Homeland Security Capital Corp., a Pink Sheets-traded holding company looking to consolidate homeland security-related businesses, announced in January that subsidiary Nexus Technologies Group, a security systems integrator, has signed a letter of intent to acquire Linear Technologies, an IT integrator specializing in data networks and telecommunications based in New York City.
Terms of the deal were not disclosed, but a provided release reported Linear's 2006 revenues at $12 million, and projected $15 million in revenues for 2007. The combined companies are expected to exceed $25 million in 2007.
Thomas McMillen, chairman and chief executive officer at HSCC, said Nexus already has a robust working relationship with Linear, and referred to the deal as more of a recapitalization for Linear. Nexus also has plans to move its offices into Linear's 24th Street location in New York City. Linear partners Peter Pulao and Kevin Mackey will both remain with the company.
"We're right where we want to be," said McMillen Nexus' market position. "This will give us good critical mass in New York City, and scale in a Mid-Atlantic market that we think is quite attractive." Further, he said Linear's focus on data and cabling was a prime motivator. "Our view is that we'd rather have a broader set of products than just security," he said, "because we have our customers asking for it. We're able to capture more business and it helps you make the sale in the first place."
Homeland Security Capital has been active in the market over the past 12 months. In August 2006, the company purchased access control manufacturer SecurityInc, along with its affiliates Cyberlynk, an IT support company, and AAID Security Solutions, a RFID manufacturer and distributor. In March 2006, HSCC attempted to purchase Massachusetts-based security integrator Viscom Systems, but negotiations broke down in the due diligence phase.
HSCC hopes to close the Linear buy by the end of March.
In other HSCC news, Thomas Rosato has joined the board of directors. Rosato is chief executive officer of Fortress International Group, purchased by Fortress America Acquisition, another public company run by Thomas McMillen, this past summer. Rosato founded Total Site Solutions and Vortech, two companies similar to Linear, combined by HSCC to create Fortress International. He also owns part of S3 Integration, a Baltimore security integrator.