ITS Corp., which has grown in recent years through acquiring smaller companies, is now an acquisition target.

By the end of this month, QinetiQ North America plans to complete its purchase of Oxnard-based ITS in a deal that could reach $90 million.

QinetiQ will pay $80 million, followed by an additional $10 million if ITS receives its projected contracts for 2007.

ITS is a private company that provides information technology and engineering services for the U.S. military, intelligence and homeland security and other federal government agencies.

ITS is expected to generate $100 million in annual revenue this year, and it employs about 1,000 people throughout the U.S., including from 50 to 60 in Ventura County.

The company has been growing under President and Chief Executive Officer Thomas Sundling since 2004. In recent years, ITS has acquired two smaller companies that helped build its portfolio and relationship with the federal government.

Now, QinetiQ (pronounced like kinetic) is acquiring ITS as part of its own growth strategy in information technology.

The North America company is a subsidiary of QinetiQ Group, a publicly traded company based in the United Kingdom. QinetiQ Group's revenue was 1.05 billion pounds with operating profit of 90.7 million pounds for 2006. At current conversion rates, that's about $2.07 billion in revenue and $178.7 million in profit.

QinetiQ North America provides technology services, systems engineering and technical assistance and information technology services.

ITS will join other subsidiaries focused on work for the U.S. government operating under QinetiQ North America.

As a wholly owned subsidiary, much of how ITS operates won't change, Sundling said Tuesday.

Any change for the company's customers will be a good one because ITS will now be able to draw upon QinetiQ's resources and provide them with more, he said.

Sundling added that ITS will continue to grow from within and through acquisitions.

ITS has been able to maintain its contract portfolio, business model and performance while acquiring new companies, something that QinetiQ liked.

"They want to continue to see us grow through organic growth and acquisitions and maintain those same characteristics," Sundling said.

ITS' recent growth also has included partnerships that expand the company's reach. Most recently, the company announced a partnership with Pyramid Systems Inc. to provide information technology services, including software development and system integration, for the U.S. Department of Housing and Urban Development.

Last week, the companies submitted a proposal for the deal, which is worth in the tens of millions, under a General Service Administration contract that ITS has held since 1999. They're expecting an answer in May.

The GSA contract has brought ITS more than 350 projects and combined revenue of $240 million since 1999. ITS is the top-rated contractor out of the 10 that work under that contract for federally funded information technology projects.

"The contract provides the basis for our growth, during the last eight years or so," said John Gregorits, ITS vice president. "We're competing with some of the largest system integrators and IT companies in the world. To win against some of these guys is significant."

He added that the contracts are sought by the largest systems administrators, such as IBM, Science International Corp. and Lockheed Martin.

On the Net:

http://www.itscorporation.com

http://www.qinetiq-na.com