IBM acquires Reston IT contractor Octo

Technology giant IBM has agreed to acquire Reston, Virginia-based government IT contractor Octo Consulting Group for an undisclosed sum.

IBM is buying the company from Chevy Chase, Maryland-based Arlington Capital Partners, which acquired Octo in 2019.

Octo, founded in 2006, has about 1,500 workers. The IT modernization company’s fields of focus include artificial intelligence, cybersecurity, cloud, open source and blockchain.

The company’s clients are exclusively federal government defense, health and civilian agencies.

Octo will become part of IBM Consulting’s U.S. public and federal market organization, which currently has about 4,200 employees.

“Octo was founded on the belief that digital transformation could be delivered at scale to modernize the federal government’s approach to today’s most pressing challenges — from public healthcare to national security, to defense and intelligence,” said Mehul Sanghani, chief executive officer of Octo.

“Today, we are excited to join forces with IBM to continue to deliver these digital transformation capabilities with greater reach and scale.”

This is IBM’s eighth acquisition this year, and the 25th since Arvind Krishna became IBM chief executive in April 2020. Most acquisitions have bolstered IBM’s artificial intelligence and cloud businesses.

As part of the acquisition, IBM will gain Octo’s 14,000-square-foot innovation center, expanding IBM’s ability to work collaboratively with federal agencies.

The acquisition is expected to close before the end of 2022, pending regulatory approval.

Jeff Clabaugh

Jeff Clabaugh has spent 20 years covering the Washington region's economy and financial markets for WTOP as part of a partnership with the Washington Business Journal, and officially joined the WTOP newsroom staff in January 2016.

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