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Arlington Capital Partners Announces Sale of Apogen Technologies, Inc. to QinetiQ

WASHINGTON, DC, August 2, 2005 – Arlington Capital Partners, a Washington, DC based private equity firm, today announced the sale of one of its portfolio companies, Apogen Technologies, Inc. – a leading provider of information technology to the US Federal government located in McLean, VA – to QinetiQ, a leading global defense technology and security company based in the United Kingdom. Upon regulatory approval, Apogen will become a wholly-owned subsidiary of QinetiQ North America and will remain autonomous, retaining its name, executive management team, staff and facilities.

The purchase price of approximately $300 million reflects Apogen’s strategic positioning within the Federal IT market, its valuable long-term customer relationships and the company’s strong growth prospects.

“Apogen has been a very successful investment for Arlington Capital and the sale of the Company represents a strong example of our core strategy of identifying and partnering with Operating Executives to pursue opportunities in industries with strong fundamental characteristics and growth prospects,” said Jeffrey Freed, Partner at Arlington Capital Partners. “Under the leadership of Todd Stottlemyer, Paul Leslie, Phil Odeen and the entire Apogen management team, the Company was able to achieve significant organic growth during our ownership, and successfully integrated an acquisition while providing work of national significance to our customers.”

Todd Stottlemyer, Apogen’s Chief Executive Officer, said, “ Arlington’s relationships, financial expertise and acquisition experience in the government space made them an invaluable partner during this period of growth. Now, joining QinetiQ will help us accelerate our growth plans through access to technologies that complement and enhance our current service and solution offerings.”

“We are very pleased with the strategic value we were able to build at Apogen. During our ownership, Apogen tripled both its sales and operating profits through a combination of organic and acquisition growth. Apogen has seen explosive growth in its business with the Department of Homeland Security, becoming one of the top 10 contractors serving this department,” said Michael Lustbader, a Principal at Arlington Capital. “Apogen is well positioned for future growth and we believe the QinetiQ-Apogen platform will be a powerful one.”

Arlington sought to create a leading mid-tier provider of high-end services and solutions to areas of national importance within the Federal government, and partnered with Todd Stottlemyer and Paul Leslie, two accomplished operating executives who shared Arlington’s vision. In March 2003, Arlington acquired ITS Services to serve as its platform company and in January 2004, Science & Engineering Associates, Inc. was acquired to gain access to the Department of Defense market. The combined company was re-branded as Apogen Technologies, Inc. in mid-2004.

“The Federal IT services sector is particularly attractive to us because it combines strong growth from increased outsourcing and total spending by the government, with the stability of long term contracts,” said Jeffrey Freed. “Even though we are selling Apogen, we remain committed to investing in the government services sector.”

The merger is expected to close in September, pending government approvals.

About Arlington Capital Partners

Arlington Capital Partners is a Washington, DC-based private equity firm focused on middle market buyout investment opportunities in growth industries including: aerospace/defense, IT and engineering services, media, education & training, healthcare services, business services & outsourcing, and specialized manufacturing and related industries. Arlington invests in companies in partnership with high quality management teams that are motivated to establish and/or advance their company’s position as leading competitors in their field.

About Apogen Technologies

Apogen Technologies  provides technology solutions to government entities to address complex, mission critical challenges of national significance. Current customers include: U.S. Department of Homeland Security, U.S. Department of Agriculture, U.S. Census Bureau, U.S. Customs and Border Protection, U.S. Department of Defense, U.S. Department of Energy, Internal Revenue Service, and the U.S. Navy. Apogen Technologies is ranked number 48 on Washington Technology’s Federal 100 list and is also listed in the top 10 Department of Homeland Security contractors. Apogen Technologies’ growth has been noted with a ninth place ranking on the Washington Business Journal’s 50 fastest growing company’s list and a 13th place rank on Deloitte’s Virginia Fast 50 list. Apogen was recently ranked as one of the Best Large Companies to Work For in the Greater Washington Area by the Washington Business Journal.

About QinetiQ

QinetiQ (pronounced ki’ ne tik as in ‘kinetic energy’) (www.QinetiQ.com) is a leading global defence technology and security company. Founded in July 2001 from the majority of the Defence Evaluation and Research Agency (DERA), the laboratories of the UK MOD, QinetiQ today has grown internationally, with 12,000 employees in the UK and US, many of them internationally acclaimed experts, providing government and commercial customers unparalleled resources to create, evaluate, test, and deliver technology based services, solutions and products. In September 2004 it also acquired the businesses of Foster-Miller Inc and Westar Aerospace & Defense Group. Both are wholly-owned subsidiaries of QinetiQ North America but remain autonomous, retaining their names, core management teams, employees and US facilities.

Contacts:

Contact: Jeffrey Freed
Michael Lustbader
Arlington Capital Partners
5425 Wisconsin Ave
Suite 200
Chevy Chase, MD 20815
(202) 337-7500

 SOURCE: Arlington Capital Partners