DRCO Dynamics Research Corp. (MM)

Impact Innovations to Sell Government Division; Commercial Division to Continue to Serve Dallas, Atlanta ATLANTA, Aug. 2 /PRNewswire/ -- Information technology (IT) services leader Impact Innovations Group announced today it has agreed to sell its Government Division to Dynamics Research Corporation (NASDAQ:DRCO) for $53.4 million in cash. Impact's Commercial Division will subsequently be purchased by the current operating management team and continue to serve Fortune 500 and middle market customers in Dallas and Atlanta. The companies expect the transactions to close in the third quarter. "These transactions offer a successful conclusion for our financing partners, Cravey Green and Wahlen and Allied Capital. The government operation will benefit by becoming part of a larger company that is focused primarily on government IT services. Its success and growth under the leadership of division president Ellen Glover made them a logical acquisition candidate," said Jim Childs, chief executive officer of Impact Innovations. "At the same time, this transaction will allow the management team that has built the commercial division an opportunity to assume control and expand the successful middle market business in Atlanta and Dallas," he added. Impact Government is recognized as a leading provider of strategic IT services primarily to the Intelligence and Defense agencies of the Federal government. In 2003, the unit secured Federal contracts in excess of $165 million. The $40 million commercial operation, with 335 employees, will retain the Impact Innovations brand and continue to provide IT consulting, staffing and outsourcing services. It will be led by current partners John Martin and Jon Piot. The unit will be based in Dallas with an office in Atlanta. Clients include Texas Instruments, Cox Communications, Mary Kay, RPC, Inc. and Blockbuster. "The commercial operation has been successful and this transaction will provide the company with increased flexibility and focus to better serve major and mid-market companies," Martin, Impact's executive vice president, said. "Our commitment to mid-market companies is clearer than ever and we will continue to tailor our services to better complement their unique IT needs, while serving our larger clients," added Martin. Impact's consulting service helps organizations maximize IT investments and streamline internal operations, while the company's outsourcing services provides help desk and application management. The staffing arm sources IT professionals on a contract, permanent or managed services basis for both large and mid-size companies. Impact Government, with offices in Washington D.C., manages IT projects for several Federal agencies, including the National Security Agency, Federal Deposit Insurance Corporation and the National Archives and Records Administration. About Impact Innovations Group Impact Innovations Group is a $90 million provider of IT Execution and Outsourcing Services to government agencies and mid-market companies. The company's talented professionals, proprietary project management methodology and quality assurance processes help clients achieve exceptional results through information technology. Please visit http://www.impactinnovations.com/ to learn more. DATASOURCE: Impact Innovations Group CONTACT: Fred Stern, ext. 260, or , or Thomas Moore, ext. 229, or , both for Impact Innovations Group, +1-214-373-1601 Web site: http://www.impactinnovations.com/

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