Immigration agency contractor in Lincoln sold to British firm

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By the Lincoln Journal Star

The company that provides office support for the Department of Homeland Security’s U.S. Citizenship and Immigration Services in Lincoln is being bought by a British support services group.

Serco Plc said it is buying U.S. government services provider SI International for $32 a share, $423 million.   SI’s stock leapt at the news.  It was up $8, 35 percent, to $30.89 on the Nasdaq Stock Market Wednesday morning. 

Since last year, SI International, an information technology and network company, has had a contract with USCIS to provide office support for the USCIS Service Centers in Lincoln and in Dallas.

As of April, about 500 people worked for the center in Lincoln, 300 directly for SI International, and 200 for subcontractors, according to the company.    Most, if not all, work at the Star Building, 850 S St., according to the USCIS office. 

SI International operated as a subcontractor for the agency in Lincoln from 2001 until last year.

Its prime contract had a one-year base period and two one-year options with a ceiling value of approximately $225 million, if all options and award terms were exercised, according to the company.

SI International provides support services to the USCIS in mailroom operations, electronic data entry, fee collection and the tracking and maintenance of files on more than 6 million applications and petitions received by the USCIS annually. The company also is responsible for assembling, maintaining, storing and retrieving incoming petitions, applications and supporting documents.

Serco will also assume Reston, Va.-based SI's debt, which was at $87.3 million on June 28.

Serco's contracting clients include the British government, as well as the European Space Agency and a broad array of U.S. defense, intelligence and civil agencies.

In 2005 Serco acquired defense contractor RCI and in 2007 won nearly $1 billion in contracts for logistics, port security, transformation of government services, aviation services and military personnel support for clients that include the U.S. Army, Navy, Marine Corps and the U.S. Postal Service. 

It has 7,000 employees in North America, and the deal would take that number to 11,500, the company said.

Serco, a publicly traded company, said the acquisition of SI International would give it a strong platform for growth across the U.S. armed forces and civil federal government agencies.

Chief Executive Christopher Hyman told reporters in a conference call that Serco expects to start achieving annual cost savings of $10 million in the second full year after completion.

SI’s clients include the U.S. Air Force, Army, Department of Defense, intelligence community, and 15 federal civilian agencies, including the Department of Homeland Security, the Department of State, and Federal Retirement Thrift Investment Board.

SI has a turnover of more than $500 million and a workforce of about 4,500 people.

Serco expects to achieve savings by efficiency measures such as combining the two groups' head offices, Hyman told Reuters.  It was too early to say whether there would be job cuts, he said, although the company hopes to grow the business.