By Lisa Kerner
Charlotte, N.C., Aug. 27 - SI International, Inc. agreed to be acquired by Serco Inc. for $32 per share in cash, or a total of approximately $423 million.
Serco, the U.S.-based division of Serco Group plc, will assume SI International's debt of $87.3 million, net of cash, as part of the deal.
A form 8-K filed with the Securities and Exchange Commission said a $10 million termination fee is also part of the merger agreement.
The boards of directors of both companies have approved the transaction, which is expected to close by the end of 2008.
Serco said it will fund the acquisition from £700 million of new fully committed multi-currency bank debt facilities, which will also refinance its existing bank debt.
The combined companies would have total revenues of approximately $1.3 billion, based on 2007 reported financial results, an SI International news release said.
Annualized cost savings could reach $10 million in the second year after the merger's close. The acquisition is expected to be accretive to Serco's adjusted earnings in its first full year of ownership, the company said.
"SI International strengthens our ability to bring business process re-engineering (BPR) and technology solutions to the most demanding government missions, while our increased combined scale positions our businesses to deliver even larger and more complex integrated solutions for our customers," Serco chairman and chief executive officer Ed Casey said in the release.
Casey will lead Serco's enlarged North America business following the merger's close.
Serco said the proposed acquisition of SI International would be the second major transaction in three years for its North American division.
UBS Securities LLC advised Serco. SI International was advised by Wachovia Capital Markets, LLC.
Serco Inc. is a Reston, Va.-based government contractor. Its customers include the Department of Defense, U.S. intelligence and security agencies and federal civilian agencies.
SI International provides information services, technology and network solutions primarily to the federal government. The company is also located in Reston, Va.
| Acquirer: | Serco Inc.
|
| Target: | SI International, Inc.
|
| Announcement date: | Aug. 27
|
| Transaction total: | $423 million
|
| Price per share: | $32.00
|
| Expected closing: | End of 2008
|
| Stock price for target: | Nasdaq: SINT: $22.89 on Aug. 26
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
