LGS Innovations Keeps Plans For San Antonio Cyber Hub After $750M Sale to CACI

San Antonio—[Updated 3:02 p.m. See below.] LGS Innovations, a Virginia-based tech company focused on cybersecurity and communications, still expects to open a cybersecurity operations hub in San Antonio, TX, after its acquisition by federal contractor CACI International.

LGS announced Jan. 23 it was considering opening a hub in San Antonio for some of its cybersecurity programs, including network operations, software development, and training. The Herndon, VA-based company was also considering locations in Maryland, Virginia, and Georgia, and was waiting to make a final decision based on whether the city of San Antonio and the government of surrounding Bexar County approved a pair of incentive packages worth up to a combined $230,000. Both were approved this week.

Then, on Wednesday, Arlington, VA-based CACI (NYSE: CACI) announced it would acquire LGS for $750 million from LGS’s private equity owners, Madison Dearborn Partners and CoVant Management. Even though acquisitions can throw a wrench into business plans, an LGS spokesperson confirmed to Xconomy that the company expects to move forward with new operations in San Antonio.

“LGS Innovations disclosed the deal with CACI to the (San Antonio city) council and plans to follow through on their plans to open a new facility and build a thriving cybersecurity practice in the area,” wrote Kevin Kelly, CEO of LGS, in an e-mail sent by a spokesperson. CACI spokesperson Jody Brown said the company will disclose more information when it closes the acquisition. [Updated attribution of comment from LGS.]

LGS was founded as a division of Bell Labs and was acquired by private equity firms in 2014. It provides products and services in secure networking, cybersecurity, laser communications and photonics, custom software development, and digital signal processing to government and commercial customers, according to a news release from its former owners.

The city of San Antonio approved a $180,000 economic grant for cyber-related employee training and a requirement that the company eventually make 46 new hires, according to the San Antonio Economic Development Foundation. Bexar County’s grant funding will provide the business $1,000 for every job it creates (that pays at least $50,000) during its first five years, up to 50 total, the foundation says.

LGS is opening its office at Port San Antonio, a 1,900-acre property with industrial facilities and office space. The area is growing a cybersecurity hub, having already attracted numerous firms, including government contractors such as Lockheed Martin (NYSE: LMT). Port San Antonio is developing tens of thousands of square feet of building space intended for cybersecurity and other advanced technology companies, an initiative known as Project Tech.

David Holley is Xconomy's national correspondent based in Austin, TX. You can reach him at dholley@xconomy.com Follow @xconholley

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