Deloitte increased the size of its San Diego operation by about 30% and augmented its capability in cybersecurity and systems engineering by acquiring privately held Sentek Global in a deal announced on July 26.
Financial terms of the transaction were not disclosed.
With the acquisition, Deloitte brought on roughly 157 people, increasing its total local headcount to more than 650.
The acquisition comes at a time when Deloitte is bringing more people to its San Diego office to support other projects, said Juli Moran, managing director and San Diego marketplace leader for Deloitte. In addition to the Sentek deal, Deloitte has brought on more than 100 new hires since April 1, as well as 34 employees transferring from other offices.
Moran attributed the increased headcount to San Diego’s vibrant, fast-growing, tech-oriented economy, with its overlapping information technology and medical sectors. “We’re seeing existing clients grow,” she said. “We’re also seeing a fair number of IPOs.”
Sentek, with annual revenue in the range of $40 million to $45 million, was based in Point Loma. The business provides systems engineering and cybersecurity services to the U.S. Navy. One major client was NAVWAR, the Naval Information Warfare Systems Command. Eric Basu was 100% owner of Sentek.
Deloitte plans to keep the business in San Diego. Sentek will become part of Deloitte’s Defense, Security and Justice sector, which does $1.4 billion in business. The sector is part of Deloitte’s Government and Public Services practice, which does $5.5 billion in business.
Seeing potential in the federal space, Deloitte has invested in recent years to bring more capabilities to its U.S. Department of Defense customer, said Heather Reilly, principal with Deloitte Consulting LLP and leader of its Defense, Security and Justice operation.
While Deloitte has a large cybersecurity business that supports Fortune 50 companies, Reilly said her business did not have what she called “the mission cyber angle” — in other words, what happens on ships and what happens with satellites.
Deloitte plans to take its newly expanded mission-focused systems engineering capabilities and cyber offerings and make them available to other military branches and federal agencies, said Mike Canning, U.S. Government and Public Services Industry leader and principal with Deloitte Consulting LLP.
“We’re thrilled,” Moran said of Deloitte’s newest San Diego business. “It couldn’t be a better fit.”
A Five-Year Relationship
Sentek and Deloitte have worked jointly on Navy contracts for about five years. During that time, Reilly said, Deloitte took notice of its partner. In Sentek, she and her fellow executives saw a small business “doing an amazing job” competing with larger contractors. That told Deloitte that Sentek had strong relationships with its clients.
Both Basu and Reilly said the businesses have similar cultures. The management team that Basu put in place will continue to run the operation.
Basu said he had been talking to Deloitte as well as other potential suitors for about a year.
The sale was “bittersweet,” Basu said. “I really feel like I left on a high note.”
Basu said he plans to continue work on a second project called Haiku Cyber Range. The business offers cybersecurity training through an online game. Basu said he would like to eventually take that business to an initial public offering.
Some 148 of the 157 former Sentek employees that Deloitte is retaining will be based at Deloitte’s new headquarters at One Paseo in Carmel Valley.
Moran called Sentek “a fantastic acquisition for us.”
FOUNDER: Eric Basu
HEADQUARTERS: Point Loma
BUSINESS: Defense contractor specializing in systems engineering and cybersecurity
REVENUE: In the range of $40 million to $45 million
EMPLOYEES: More than 150
NOTABLE: Founder Eric Basu is a former Navy SEAL commander
CONTACT: (619) 543-9550
CEO: Punit Renjen (Global); Joseph Ucuzoglu (U.S.)
SAN DIEGO MARKETPLACE LEADER: Juli Moran
HEADQUARTERS: New York City
BUSINESS: Professional Services
REVENUE: $23.2 billion in 2020
EMPLOYEES: Approximately 655 in San Diego; 330,000 worldwide
NOTABLE: The firm was founded by William Welch Deloitte in London in 1845
CONTACT: (619) 232-6500