M&A: NTT DATA Services to Acquire NETE, greatly expands Federal Health portfolio and capabilities

“NTT DATA Services, a recognized leader in global technology services, today announced it has entered into a definitive agreement to acquire NETE, a provider of digital design and transformation services for U.S. Department of Health and Human Services (HHS) agencies.”

“NETE drives global advancements in health and biomedical research through digital services, agile application development, clinical/bioinformatics, advanced data analytics, cloud, and cybersecurity. With more than two decades of experience, NETE has established a strong reputation for delivering transformative digital services across key HHS agencies, including the National Institutes of Health (NIH), Centers for Medicare and Medicaid Services (CMS), and Health Resources and Services Administration (HRSA).”

“NETE has pioneered innovative health technologies and supported the prevention, detection, diagnosis, and treatment of diseases and disabilities both domestically and internationally. Their digital capabilities and thought leadership enhance the value NTT DATA can deliver to our public sector healthcare clients,” said Tim Conway, President, Public Sector, NTT DATA Services. “The companies are also a great cultural fit, as NETE’s commitment to diversity perfectly complements NTT DATA’s global culture of acceptance and equality.”

“With the acquisition, NTT DATA will add more than 300 highly qualified team members and further expand the company’s breadth of services across the public sector health space by growing its digital expertise in federal health. Clients will benefit from the companies’ combination of digital services, consulting, and leadership in healthcare.”

“NETE clients and employees will benefit from access to the vast resources of a top 10 technology and business services provider, including global R&D, infrastructure and investments in digital transformation and innovation,” said Sandeep Somaiya, Managing Director, NETE, who will continue to serve as part of the NTT DATA public sector leadership team. “The depth and breadth of NTT DATA’s commercial experience among healthcare providers, health plans and life sciences, as well as its strong reputation in the public sector, will open the door for additional opportunities for NETE customers.”

“The NTT DATA Services public sector division combines more than 50 years of government experience with commercial expertise to deliver insights, solutions and meaningful outcomes that enable agencies to better serve the public.”

“The transaction is expected to close later this year and is subject to customary closing conditions and regulatory approvals. Baird served as the exclusive financial advisor to NETE for the transaction…”

Read the full press release here.

Source: NTT DATA Services to Acquire NETE, Expanding Digital Transformation Capabilities in the Federal Healthcare Sector, December 18, 2019. NTT DATA.

G2X TAKE: Over the past few years we have seen global technology services leader NTT DATA quietly expanding their footprint by way of acquisition and successfully stringing together contract wins, but this latest move to acquire Digital Health Transformation leader NETE, easily one of the top partners to HHS and specifically NIH and CMS over the last few years, is certain to have the competition taking notice. 

NTT DATA is a long term partner to the Federal Government, but the $3.1B acquisition of the services arm for Dell this time three years ago, a firm who at the time was rated by Gartner as the No. 1 Global IT Services firm for Healthcare providers, was our first indication that this group was intent on being a major player in the Federal Health space. 

This acquisition of NETE only further expands the NTT Federal Healthcare portfolio and specifically gives them access to a number of key Prime contract vehicles, to include CMS SPARC, CIO-SP3 SB and numerous NIH and CIT specific BPAs, along with Prime past performance at HRSA, CMS and at nearly every one of the NIH institutes. In terms of a puzzle piece, NETE and NTT DATA make a lot of sense as the NETE portfolio complements the current set of contract and past performance this group already maintains across HHS. Did we mention the Prime access to the $300M DHS Services for Enabling Agile Delivery (SEAD) BPA?

Armed with access to nearly every major contract vehicle out there, and the additional insight that Sandeep Somaiya, NETE Managing Director can provide as a member of the NTT DATA leadership team, this group will be #onetowatch as we head into 2020.

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