SRA International Going Private in $1.8B Deal

By Markets FOXBusiness

SRA International (SRX) inked a $1.88 billion cash deal to be acquired by an affiliate of Providence Equity Partners, ending a six-month search for a suitor.

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Under the terms of the deal, SRA shareholders will receive $31.25 a share in cash, representing a 10.2% premium over its closing price on Thursday.

The provider of technology and strategic consulting services to both government and commercial clients said its board of directors unanimously approved the transaction, with SRA founder and Chairman Dr. Ernst Volgenau abstaining.

“We believe in the merits of this transaction, which serves the best interests of our shareholders, as well as those of our 7,300 employees and more than 1,400 contracts with customers,” Volgenau said. “We also look forward to partnering with Providence, whose values and culture are consistent with SRA’s longstanding ethic of honesty and service.”

Managing director of Providence, Julie Richardson, said the government information services market is highly attractive to the company, and SRA’s leadership in national security, civil government, global health and intelligence sectors makes it very attractive.

Following the close of the deal, which is slated for this summer with the acceptance of shareholder and regulatory approvals as well as other customary closing conditions, SRA will remain headquartered in Fairfax, Va. and will continue to be led by its existing management team.

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Volgenau, who owns approximately 11.8 million share, representing 21% of total shares outstanding and 71% of voting rights, has agreed to vote his shares for approval of the merger.
SRA may solicit acquisitions bids from third parties for a 30-day period form the date of the merger agreement.

SRA decided to sell itself in October, when its board formed a special committee of independent directors to explore the possibility of an acquisition. The company saw a “highly conditioned expression of interest” in December in the range of $30 to $31 a share, though it did not name the party and said the bid never materialized.

The transaction is to be debt financed by Bank of America (BAC) and Citigroup (C).

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