Send PM
Followers 69
Posts 5819
Boards Moderated 0
Alias Born 10/19/2006

Re: None

Tuesday, 10/23/2018 2:21:52 PM

Tuesday, October 23, 2018 2:21:52 PM

Post# of 193
5 buyers were in the mix for Engility before SAIC won out

Back in February, the same month Science Applications International Corp. was in the midst of an escalating bidding war to acquire CSRA Inc. — eventually won by General Dynamics Corp. in a government IT services market-shaking deal — the Reston company made overtures to Engility Holdings Inc. about possibly joining forces.

The two entered into a nondisclosure agreement Feb. 26 and had an initial exchange of information, but discussions didn’t move forward enough to talk purchase price. Then, on May 23, Engility (NYSE: EGL) CEO Lynn Dugle briefed her board on the preliminary discussions with SAIC (NYSE: SAIC) and a committee was pulled together to pursue potential M&A opportunities for the Chantilly company.

Before long, Engility itself was being pursued by multiple suitors offering escalating deal terms.

That’s according to a new regulatory filing from SAIC that fleshes out the timeline of its deal to acquire Engility for $2.5 billion in stock and how it came together. The deal, announced Sept. 10, came just a just a few months after news broke that Engility was reportedly being offered for sale.

When the deal closes, expected by Feb. 1, 2019, SAIC shareholders will own roughly 72 percent of the company and Engility (NYSE: EGL) shareholders will have the remaining 28 percent. SAIC CEO Tony Moraco recently told the Washington Business Journal the corporate integration work is progressing nicely, though his company’s stock price was down as much as 15 percent since deal was announced so Moraco was undertaking a charm offensive with Wall Street to explain the deal and why it works.

The union will create a company with 23,000 employees and $6.5 billion in annual revenue, trailing only Reston-based Leidos Holdings Inc.(NYSE: LDOS), at about $10.3 billion or more in revenue, and General Dynamics' (NYSE: GD) information technology business, with $9.9 billion in revenue following its blockbuster deal earlier this year to acquire CSRA Inc.
Trending
Government & Regulations
Lockheed’s ballistic missile defense system clears another hurdle
Lockheed’s Long Range Discrimination Radar builds on the weapons and technologies that Bethesda defense contracting giant provides for all three segments of the Missile Defense Agency’s layered Ballistic Missile Defense System being developed. That includes the Patriot Advanced Capability-3 missiles and the Terminal High Altitude Area Defense system.
Government & Regulations
Report: Belgium ready to buy billions worth of F-35s
Lockheed and the Pentagon tout the F-35 as more than a fighter jet — it’s the most advanced fighter aircraft ever built, featuring stealth technology, supersonic speed, powerful sensors, large weapons capacity and the ability to collect, analyze and share data.
Coming Event
CraneWatch Live! East End

Nov. 15

The transaction, rumors of which first surfaced in July, is another example of the consolidation gripping Greater Washington’s government contracting sector via seismic M&A activity. Companies are aggressively trying to beef up to put themselves in position to compete on complex, big-ticket contracts at a time of surging budgets for defense, national security and IT modernization.

When word first leaked about Engility being up for sale, CACI International (NYSE: CACI) was also reportedly vying for the company along with SAIC. Beginning in early June, according to SAIC’s regulatory filing, four potential buyers would enter the mix. They were:

Company A, described as as “a publicly-traded engineering, construction and government services firm” — approached Engility about a deal.
Company B, a government services industry firm.
Company C, a construction, engineering and government services firm.
Company D, “a financial sponsor with experience and multiple past and present portfolio companies in the aerospace and defense sector."

Several government contracting market watchers, asked to offer informed speculation on the identity of the potential buyers in return for anonymity, locked in on a small handful of possibilities.

Company B was likely CACI while Company D was probably Veritas Capital but could also be The Carlyle Group (NASDAQ: CG), both private equity firms. Speculation on the identities of the engineering, construction and government services firms that were in the mix — Company A, specifically described as publicly traded, and Company C — centered on a few big names looking to extend their reach into the cyber, space and intelligence markets, capabilities that are in high demand. KBR Inc.(NYSE: KBR), AECOM (NYSE: ACM) and Parsons were seen fitting that bill.

Dugle and Moraco had several discussions over several weeks, Dugle reported back to her board, and financial advisers were retained and four other “strategic partners” — potential buyers — were contacted to explore their interest.

On July 11 Engility retained Weil, Gotshal & Manges LLP as outside legal counsel and met with members of SAIC management in D.C. That same day, Reuters reported Engility was exploring a sale — and its stock jumped more than 10 percent to $31.66 per share.

Company A and Company C dropped out of the running a day later. SAIC made a preliminary offer on July 17 with an offer price of $37.52 per share of Engility stock. And on July 20 Company D entered the fray.

Company B submitted a preliminary all-cash offer July 23 at a range of $37 to $38 per share of Engility’s common stock. Company D submitted a revised proposal on Aug. 8 with a range of $37 to $39 per share of Engility’s common stock. Company B then dropped out Aug. 11, citing organizational conflict-of-interest concerns.

SAIC submitted a revised offer Sept. 4 with an implied offer price of $40.96 and the addition of two board seats to be filled with Engility directors. Company D decided that day not to submit a final bid.

Under the final deal terms, Engility stockholders will receive 0.450 shares of SAIC common stock for each share of Engility stock, based on the SAIC closing price of $89.86 on Sept. 7.

Citigroup Global Markets Inc. will provide SAIC a seven-year secured loan worth $1.05 billion to repay Engility’s existing debt and other fees. Engility stock closed Sept. 7 at $36.21.

Engility will pay SAIC a $50 million termination fee and reimburse $10 million in expenses, under certain conditions, if the deal is called off. SAIC will pay Engility a $100 million termination fee, under certain conditions.

https://www.bizjournals.com/washington/news/2018/10/22/5-buyers-were-in-the-mix-for-engility-before-saic.html?ana=yahoo&yptr=yahoo

GO SAIC

"PEACE"

Volume:
Day Range:
Bid:
Ask:
Last Trade Time:
Total Trades:
  • 1D
  • 1M
  • 2M
  • 3M
  • 6M
  • 1Y
  • 2Y
  • 3Y
  • 5Y
Recent SAIC News

FEATURED New Break Identifies High-Grade Gold, up to 70.60 g/t Au, via Grab Sampling at Moray Sep 29, 2022 10:29 AM

FEATURED Rising Star Trillion Energy Ready to Supply Much Needed European Gas Sep 29, 2022 8:00 AM

FEATURED Goldshore Intersects 192.75m @ 1.02 g/t Au from 94.45m depth in MMD-22-051 Sep 29, 2022 7:30 AM

FEATURED SFLMaven Plans for New Potential Revenue from Patent Pending HolgoGlow Technology for the Metaverse Sep 29, 2022 6:30 AM

ILUS Confirms Share Lock-Up Opportunity ILUS Sep 29, 2022 1:25 PM

ILUS Appoints Investment Bank to Assist With Up-List and Associated Acquisitions ILUS Sep 29, 2022 11:22 AM

Arts & Collectibles DOT Company Coinllectibles Seeing a Very Bright Future with Revenue jumping by 100% to US$8.8 Million in First Half of 2022 as compared to The Year Before COSG Sep 29, 2022 8:44 AM

GBT is researching the Development of Electro-Thermal Aware Design Environment for Integrated Circuits.Seeking to Address Advanced Nanometer Nodes Semiconductors Electro-Thermal Modeling and Optimization. GTCH Sep 29, 2022 7:30 AM

Ludwig's genomic-based mRNA Inflammatory Index - a Ground-Breaking Technology LUDG Sep 28, 2022 1:34 PM

Headwater Gold Commences Multi-Rig Drill Program at the Spring Peak Project, Nevada to Follow Up Epithermal Vein Discoveries HWAUF Sep 28, 2022 10:13 AM

Valiant Eagle Inc. (OTC: PSRU) Significantly Increases Its Equity Stake in Sumer Technologies, Inc., as the Ride-Sharing Company Readies Its Much Anticipated Innovative Zumr App For Q1 2023 U.S. Launch PSRU Sep 28, 2022 9:30 AM

Good Gaming Inc. Announces Official Launch Date For Their New Minecraft OP Prison Game Featuring MicroBuddiesTM GMER Sep 28, 2022 9:15 AM

Trend Innovations Holding Inc. Completes the Second Version of the AI Consultant Chatbot on the Company's Website TREN Sep 28, 2022 9:00 AM

GBT will be attending the Interactive MoneyShow Virtual Expo, on Sep 27-29, Presenting its Technologies, Innovations and Future Visions GTCH Sep 28, 2022 7:30 AM

Branded Legacy, Inc. Reduces Authorized Shares By 300 Million BLEG Sep 27, 2022 11:53 AM