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Crossing the digital divide: Matt Calderone, chief strategy officer of Booz Allen Hamilton

Matt Calderone, chief strategy officer for Booz Allen Hamilton (BAH), a prime government contractor and global consulting company, speaks with Acuris Capital Intelligence about the company’s recently announced “Volt” strategy and how that will fit into BAH’s ambitious M&A plans.

Interview by James Ward

Q: What is the BAH’s “Volt” strategy and how did it evolve?

Since 2013, we wanted to become meaningfully more technical. We left it somewhat loose, because the nature of the government market is so heterogeneous and diverse, but BAH wants to be at the intersection of mission and technology. Volt is an accelerant to that. The way that technology is affecting our clients and our industry is significant. Volt is about preparing BAH to lead technology-enabled transformation for government clients. That's going to involve a combination of homegrown technology and acquired technology that's commercial and that we know how to integrate.

As waves of technology—particularly commercial technology—come faster and have a greater effect on government, BAH wants to position itself to help our government clients use that technology to drive change.

Q. A recent investor day presentation stated that BAH increased its book-to-bill ratio substantially from 2020 to 2021. What’s going on inside the government services market that’s so rock-solid right now?

Our CEO and CFO have talked about this publicly: There's a lot of investment in government and a lot of it is geared towards technology transforming the mission. For example, there's going to be significant investment in the Treasury and the IRS. That's congressionally mandated to modernize tax collection.

How can we digitize activities on the battlefield to provide better insight to the folks that are at the tip of the spear?

Then there are the nation state attacks and cyber (crimes) that come at a continual pace. The mission of government is changing significantly—or, at least, the tools they use to execute that mission—and that requires investment.

Q: How important a consideration are targets’ ESG principles for BAH in an M&A transaction?

They are important. Our ESG program is evolving. Everything that's important to us culturally and from a values perspective has been embedded in our diligence efforts. We probably need to be a little bit more formalized and structured in linking our diligence efforts explicitly to our ESG agenda, but it's still new. Many companies we're talking to are not at the scale where they might have formal ESG programs, but culture and values matter. We have walked away from deals, good deals, because we didn't think that the target was a cultural fit.

A bit of background: In 2020, BAH made two significant acquisitions (Liberty IT Solutions and TracePoint), as well as a strategic investment in a third company (Latent AI) and it spun out a fourth into a standalone business (SnapAttack). During an October investor day conference, the company announced its new strategy, along with its plans for US$3.5-4.5 billion in capital deployments between FY2023 and FY2025, with approximately US$2 billion of it available for M&A.

This interview has been edited for clarity and length.