March 30, 2009, FAIRFAX, Va.--(BUSINESS WIRE)-- ICF International (NASDAQ:ICFI) announced today that it has signed a definitive agreement to purchase Macro International Inc. (Macro), an advisory, implementation, and evaluation services firm providing research-based solutions to U.S. federal government agencies in health and other areas. For 2008, Macro had unaudited revenues and EBITDA1 margin of approximately $150 million and 12 percent, respectively. The cash purchase price will be approximately $155 million, prior to the net present value of a tax benefit of approximately $26 million. The purchase will be funded through ICF’s existing bank credit line.

Founded in 1966, Macro provides research and evaluation, management consulting, marketing communications, and information services to key agencies of the federal government, including the Department of Health and Human Services (including the Centers for Disease Control and Prevention, National Institutes of Health, and the Substance Abuse and Mental Health Services Administration) and the Departments of State, Education, and Veterans Affairs. Headquartered in the Washington, D.C., metropolitan area, Macro has more than 700 full-time employees and operates through nine offices. In 1999, Macro was acquired by Opinion Research Corporation, which was acquired by infoGroup in 2006.

“This transaction illustrates an important element of ICF’s growth strategy—to acquire profitable, high-quality firms that provide significant growth potential and cross-sell opportunities in our key markets,” said Sudhakar Kesavan, ICF Chairman and CEO. “Macro is an excellent strategic fit for ICF, adding capabilities and clients in one of the largest of our market segments—health, human services, and social programs—which is among the most important areas of the Obama Administration’s focus,” he noted.

ICF’s acquisition of Macro brings significant scale and additional clients and capabilities to the combined entity:

• Combined scale in the health market: Macro adds strong qualifications, contracts, relationships, and experience in federal health-related programs and research. When combined with ICF’s capabilities in human services and health-related information technology services, ICF will offer a full-service array of advisory, implementation, and evaluation services in this vast and critical area. Macro is a quality firm with a long tradition of excellence that gives ICF significant presence in one of the largest areas of government policy focus.
• Complementary clients: Macro has a deep, long-standing presence in a number of federal agencies that complements, yet rarely overlaps with, ICF’s current business. These agencies include the Substance Abuse and Mental Health Services Administration, the Centers for Disease Control and Prevention in the Department of Health and Human Services, the National Science Foundation, and the Departments of State and Veterans Affairs.
• Complementary capabilities: Macro has substantial expertise and experience in research and evaluation in the areas of HIV/AIDS, chronic disease prevention, international health, behavioral health, and health communications. These areas of expertise complement ICF’s capabilities in health policy, health information technology, information clearinghouse support, strategic communications, organizational planning and design, and training and technical assistance.

Outlook

ICF is revising its 2009 guidance to reflect a nine-month contribution from the Macro acquisition, which is expected to be completed shortly. ICF now expects revenues for the year to range from $645 million to $675 million, and reaffirms its expectation that ICF’s core business organic growth will be more than 15 percent compared to 2008 levels. Based upon planned investment spending in the acquisition in 2009, ICF is maintaining its EBITDA margin guidance for the year in the range of 9-10 percent.

1 EBITDA (earnings before interest, taxes, depreciation, and amortization) is a non-generally accepted accounting principles (GAAP) measurement, which adds depreciation and amortization to operating income to derive EBITDA.