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Acquisitions / Cybersecurity / Federal government

This Virginia government IT contractor is expanding with a big aerospace acquisition

Tyto Athene’s purchase of Microtel is part of new CEO Dennis Kelly’s push to take the company to “the next level.”

Dennis Kelly, the CEO of Tyto Athene, at the 6th Annual Government & Defense Conference in 2023. (Courtesy Tyto Athene)

A Herndon, Virginia-based IT services company is expanding its customer base and tech capabilities after absorbing an aerospace firm.

Less than two months after Dennis Kelly became its new CEO, Tyto Athene acquired Microtel LLC, an aerospace tech company headquartered in Greenbelt, Maryland.

Tyto primarily works in defense intelligence, providing advanced telecommunications work, secure networking and communications, and cybersecurity. Some of Tyto’s federal customers include the Department of Defense, the Department of Justice, the FBI and the Social Security Administration.

“We’re definitely on the modernization side of the business, helping our customers modernize and improve their infrastructure to deal with the various threats that our nation faces,” Kelly said.

He said that this acquisition will allow Tyto to provide more advanced and different tech services, particularly in artificial intelligence, machine learning and aerospace technology. One of Microtel’s customers is NASA, which Tyto will now work with. (Prior to this acquisition, Tyto worked on space-related matters through projects with the US Space Force).

The financial details of the acquisition were not disclosed.

Kelly, a Navy veteran, learned all about technology in the defense sector when he was a sonar technician. He was hired in March, and this is his seventh time in a CEO position; most recently, he headed the cyber IT firm Eqlipse Technologies, which was acquired in February by BlueHalo, a defense space tech company.

Tyto and Eqlipse Technologies are portfolio companies of Arlington Capital Partners, and the investment firm asked Kelly to join Tyto to “help take Tyto to the next level.”

For the time being, Microtel will retain its name and brand because the company is so known in the industry. But eventually, in about a year, Kelly said he plans for it to integrate into Tyto’s brand.

Tyto is always hiring, Kelly said, and the acquisition doesn’t change that. Right now, Tyto is looking for software developers, network engineers and a chief growth officer. Tyto, after the acquisition, has about 1,200 employees across the United States and globally. About a third of those are based in the DMV, Kelly said. There will also be no personnel changes as a result of the acquisition.

Kelly is focusing on organic growth — expanding within the customers Tyto already has and leveraging its strengths. Acquisitions supplement this organic growth and are a key part of Tyto’s strategy, Kelly said. He’s planning for at least one more acquisition this year.

“I’ve always believed that the best kind of growth is organic growth,” Kelly said. “It’s the most cost-effective way to grow a business and it’s hard work. We have to put on our game face every day and go win new opportunities. But acquisitions will start to be part of our strategy as well.”


Update: This article has been updated since its initial publication to clarify Tyto and Microtel’s relationships to NASA, as well as Tyto’s to the US Space Force. (4/16/2024, 10 a.m.)

Companies: Department of Defense / Department of Justice

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