By Anne Laurent
Companies trying to buy their way to more federal revenue are often buying little more than brainpower. My colleague, Bloomberg Federal Business Intelligence Analyst Randy Walerius, found evidence in the goodwill that buying companies have been putting on their balance sheets after acquisitions.
Goodwill measures the difference between the price paid to buy the company and the value of tangible and other intangible assets that can be quantified.
Scouring the third quarter reports of several federal service providers, Randy found they have far more goodwill on their balance sheets than the average for the top 10 contractors in their industries.
For example, when ICF International Inc. bought web developer Ironworks Consulting LLC, ICF allocated $74.4 million of the $101.9 million purchase price, or about 73 percent of thevalue, to goodwill. The top 10 federal government technology vendors in fiscal 2011 had average goodwill of 26.1 percent of assets on their most recent balance sheet reports.
Anne Laurent is Bloomberg Government’s team leader for defense and federal business intelligence analysts. She has 26 years’ experience covering federal government management as a writer and editor, specializing in analyzing federal acquisition. Laurent is a fellow of the National Academy of Public Administration and has served as director of the CGI Initiative for Collaborative Government at CGI Federal, and as executive editor of Government Executive magazine. She holds a master’s from the Johns Hopkins School of Advanced International Studies and a B.A. from the University of Michigan.