Focused on integrating its acquisitions, Constellis readies for new DC-area headquarters

By Marjorie Censer / August 29, 2019

Constellis, the security contractor created by combining some assets of Blackwater with other companies ranging from Triple Canopy to Centerra Group, is concentrating on integrating its legacy businesses, according to its new chief executive.

Tim Reardon, who took the helm a year ago, told Inside Defense this week that he inherited a business made up of 10 different companies, each with its own history and culture. Constellis now has 22,000 employees; the company does not disclose annual revenue.

Constellis notes that while it includes some assets of Blackwater, it has no affiliation with founder Erik Prince and Prince retains the name and brand.

“They were definitely operating in silos, so that was certainly one of the challenges that we had to overcome immediately and we’re still working very aggressively” on, Reardon said during an interview at Constellis’ Reston headquarters.

“Completing that integration is essential for a variety of reasons,” he added. “No. 1, just to be as efficient as possible as a corporation, No. 2, it will enable a lot of cost takeout to make us more affordable to our customers and, No. 3, so we can cross-sell capabilities and services to different customer sets.”

Reardon said the integration effort will “probably be a work in process for a couple more years,” noting that legacy companies were using their own accounting, human resources and finance systems.

Consolidating that “into one collective system is really an enormous task,” Reardon added. “We started that process earlier this year, we’ve made great progress, but there’s still a lot to do.”

As part of the integration, the company is planning to merge its Washington, DC-area facilities into one building in Herndon, VA, early next year.

“It’ll save us a lot of money,” Reardon said, while helping the company create a common corporate culture.

Reardon said he also restructured the company, moving from 13 organizations reporting directly to him down to four.

Constellis now has a North American operations group focused on domestic security, such as the company’s work for the U.S. Marshals Service and the Federal Protective Service. A second group specializes in international operations, including Defense Department efforts overseas as well as commercial customers operating abroad.

Constellis’ national security operations unit encompasses its intelligence business, while a fourth organization provides training, logistics and maintenance support for the three other units.

Meanwhile, Reardon said he’s also been hiring new executives to manage Constellis.

Among the additions are Sharon Watts, who previously was deputy president of defense and intelligence at Leidos, as chief administrative officer and Gordon Foster, formerly an executive at ASRC Federal and Northrop Grumman, as chief financial officer.

“I was really looking for people with experience to run a large-scale corporation,” Reardon said, adding that he sought “people from public companies that could operate at this scale and this pace and this level of transparency” as well as executives with acquisition and integration experience.

As Constellis zeroes in on integration, it’s also seeking to grow its domestic work. Reardon acknowledged the company had a “a heavy international bias in the past.”

“With the drawdown in Iraq and Afghanistan, I wouldn’t consider that part of the Middle East a growth market right now,” he said. “Historically, that’s been a big revenue generator for Constellis and its legacy” companies.

He said the contractor will still pursue opportunities in the region, “but we’re investing more heavily in the other growth markets from a business development perspective.”

Among the growth sectors Constellis is pursuing is Pentagon technology services and logistics work, background investigations business and commercial energy security work, among other areas.

Reuters last year reported Constellis, which was acquired by private-equity firm Apollo Global Management in 2016, was considering a sale. Reardon told Inside Defense Apollo is seeking long-term growth.

“The thought process is if you position the company as successfully as you can and it’s doing all the right things and it’s growing, you’ll have a lot of strategic options on the table,” he said. “They’re certainly in no rush to make any decisions on that front. I think the idea is to get the integration complete, get the company growing more rapidly, getting healthier and then let’s see what options are on the table.”