SI International sold for $511M
Washington Business Journal - by Tucker Echols Staff Reporter
SI International Inc., which gets virtually all of its business from the federal government, has agreed to be acquired by a British contractor.
Serco Inc., the U.S. division of London-based Serco Group plc, has agreed to acquire Reston-based SI International for $32 per share in cash, or approximately $423 million. Serco will also assume SI International's debt of approximately $87 million making the total value of the deal approximately $511 million.
Federal government contract revenue represented 99 percent of SI International’s second quarter revenue of $118.8 million. SI International has 4,500 employees, nearly 80 percent who hold security clearances. Its IT clients include the U.S. Air Force, Army, Department of Defense, and 15 major federal civilian agencies, including the Department of Homeland Security.
Serco Group plc, with $6 billion in annual revenue, is a management services company with military, government and commercial customers. The North American unit, Serco Inc., is based in Reston, VA, providing a variety of services to federal, state and local government and commercial customers.
Serco and SI International would have had combined revenue of approximately $1.3 billion in 2007 and 11,500 employees serving government clients. The transaction is expected to close by the end of 2008, subject to a vote of SI International's shareholders and regulatory approvals.
"We have had a tremendous track record during our ten-year history and are very proud of the leading position we have achieved in the government services sector,” said Brad Antle, president and CEO of SI International. “Now is the right time to go to the next level so the services we provide to our customers are enhanced by the scale and global reach that Serco can offer."
The per share price represents a premium of 40 percent over SI International closing stock price on Tuesday, August 26. In early Wednesday trading, SI International shares (NASDAQ: SINT) rose $8.11 to $31.00.
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