Booz Allen IPO: Lots of Revenue and Lots of Debt

Booz Allen Hamilton today filed for a $300 million IPO, and it could be a public market dream. Sure it has lots of leverage, but it also has rising revenue and a primary customer — the U.S. government — that never seems to run out of needs or cash.

The defense contractor’s revenue has nearly doubled in the past four years, climbing to $5.1 billion for the fiscal year ended March 31, 2010, from $2.9 billion in 2006. Booz’s net income was $25.4 million in 2010, up from $8.5 million four years ago. The long-term debtload is $1.5 billion.

Since being acquired by The Carlyle Group in 2008 — when Booz Allen’s U.S. government business was separated from its global commercial business — revenue has jumped nearly 42% while net income was up nearly 43 percent.

Carlyle currently owns 93% of Booz Allen Class A shares and roughly 81% of combined voting power prior to the IPO. peHUB has learned that the Carlyle Group is not expected to sell shares in the IPO.

Nearly all, or 98%, of Booz Allen’s 2010 revenue came from providing services to 1,300 clients spread across the U.S. government. This includes the Navy, Army, Department of Homeland Security, Department of Energy, FBI and the IRS.

Defense is Booz’s major business, representing more than half, or 55%, of fiscal 2010 revenue or about $2.8 billion. Another 21%, or $1 billion, of Booz’s 2010 revenue came from the U.S. Intelligence community. Booz’s civil business represented 24% of fiscal 2010 revenue or about $1.2 billion.

Booz has been helping the U.S. navy, as a subcontractor, cut the cost of building submarines to $2 billion from $3.2 billion. Booz is also working with a major client in the U.S. intelligence community on cloud computing.

In the future, Booz Allen hopes to take part in President Obama’s new healthcare plan. The President’s budget request for 2011 includes an allocation of $6.2 billion for the Department of Health and Human Services to improve healthcare information technology and systems.

Carlyle declined comment.