McNally Capital Portfolio Company, Xcelerate Solutions, Merges with VMD Corp

McNally Capital ("McNally"), a private equity firm, is pleased to share that Xcelerate Solutions ("Xcelerate"), a portfolio company of McNally, announced its merger with VMD Corp ("VMD"). Xcelerate is a leading defense and national security company, providing integrated solutions through three service areas ? Enterprise Security, Digital Transformation, and Strategic Consulting. VMD is a cybersecurity, agile engineering, and critical infrastructure protection firm based in Fairfax, Virginia. The combined company will go to market as Xcelerate Solutions, offering a comprehensive, mission-first portfolio of secure solutions to the federal government.

"We see this merger as a win-win. We share similar cultures, like-minded leadership, and a deep commitment to delivering positive mission outcomes," said Mark Drever, Chief Executive Officer of Xcelerate. "Since McNally Capital's investment, we've been actively looking to expand our security and IT capabilities through M&A. McNally's immense national security expertise, network, and efforts were instrumental in this transaction, and VMD is a great match."

"McNally Capital is proud of our partnership with Xcelerate and excited for the combined growth journey with VMD. We look forward to working together as we continue building and scaling this industry-leading platform," said Ward McNally.

The merged company boasts an experienced team of over 1,000 technology professionals dedicated to delivering a broad spectrum of cybersecurity, enterprise, and infrastructure protection services focused on mission-first delivery. The depth and versatility of the two companies as one presents opportunities for diversification and growth across its defense, law enforcement, national security, civilian agencies, and the federal government. Mark Drever adds, "Together with VMD, our expanded capabilities, contracts, and specialized expertise make a powerful statement to the government market." Xcelerate plans to capitalize on the combined strengths of both companies, foster a mission-first culture, align leadership, and crystallize its go-to-market portfolio to best serve federal clients in the coming months.

"We are excited about what this merger will mean to our clients," echoed VMD co-founders Deepti Malhotra, Chief Executive Officer, and Vivek Malhotra, President. "Not only will it broaden our portfolio, but it will allow us to leverage the strengths of both companies, offering new solutions across our engagements."

"McNally Capital is thrilled to welcome VMD to Xcelerate and the broader McNally Capital portfolio. Like Xcelerate, VMD has built a reputation for trusted delivery, deep technical talent, and elite engineering prowess. We believe this powerful partnership will provide a solid foundation for driving future growth and creating value for our investors," said Michael Ember, Principal at McNally Capital.

McNally's investment in Xcelerate stemmed from the firm's internal expertise in the Aerospace & Defense industry and investment thesis in intelligence and national security. Xcelerate's merger with VMD bolsters this thesis and is a testament to McNally Capital's proprietary value creation framework at work. This strategic transaction accelerates the business's growth trajectory and capitalizes on McNally's expertise in implementing digital, technology-enabled, transformative solutions to modernize historically analog problems.

Ropes & Gray LLP served as legal counsel for this transaction. Nelson Mullins provided legal counsel on behalf of VMD.

About McNally Capital

McNally Capital is a private equity firm based in Chicago, Illinois. The firm is currently investing out of its committed buyout fund, McNally Capital Fund II, LP.

McNally Capital is focused on acquiring lower middle-market businesses with $5 million to $20 million in EBITDA in the Aerospace & Defense/National Security, Industrial Products & Services, and Business Services industries. The firm seeks to apply its hands-on experience, institutional capabilities, and proprietary value creation framework to its portfolio companies to benefit management teams in their next phase of growth and build value for McNally Capital's investors. The firm also leverages a deep bench of industry partners who provide incremental industry and operating knowledge.

Ward McNally founded the firm in 2007. He is a sixth-generation member of the McNally family, which proudly owned and operated Rand McNally & Company for over 100 years until its sale in 1997. These roots provide a deep appreciation of building and scaling companies that shape industries and endure for generations.

For more information, please visit www.mcnallycapital.com.

About Xcelerate Solutions

Xcelerate Solutions is a leading defense and national security company, providing integrated solutions in enterprise security, strategic consulting, and digital transformation. Xcelerate enhances the security and resilience of America's personnel as well as physical and cyber infrastructure. The company is a trusted partner to Federal Law Enforcement, the Department of Defense, and Intelligence Community agencies that are responsible for the security and safety of the United States. For more information, please visit www.xceleratesolutions.com.

About VMD Corp

VMD is a vision, mission, driven company that has been delivering information technology solutions to the Federal government in agile engineering, cybersecurity, and critical infrastructure protection since 2002. For more information, please visit www.vmdcorp.com