DLH Acquires IBA to Bolster its DoD Health Technology Capabilities
October 01 2020 - 8:00AM
DLH Holdings Corp. (NASDAQ: DLHC) (“DLH” or the
“Company”), a leading provider of innovative healthcare
research, services and solutions to the federal government, today
announced that it has acquired privately-held Irving Burton
Associates, LLC (“IBA”) of Falls Church, Virginia. The firm,
with approximately 115 employees, provides research, systems
development, and other technology-enabled solutions to the Defense
Health Agency (“DHA”), the Telemedicine & Advanced Technology
Research Center (“TATRC”) of the US Army’s Medical Research and
Development Command (“USAMRDC”), and other agencies within the U.S.
Department of Defense (“DoD”). IBA maintains a top-secret facility
clearance, and its defense contracts provide for a range of health
IT services including digital transformation, data analytics,
cybersecurity, and artificial intelligence (“AI”).
IBA was purchased for $32.0 million in cash, or
$26.5 million net of transaction-related tax benefits worth
approximately $5.5 million on a net present value basis. DLH
estimates that IBA will contribute annualized revenue of
approximately $25 million to the Company going forward, and the
firm’s backlog was approximately $143 million at closing. IBA will
be a wholly owned subsidiary of DLH Holdings Corp. and a part of
DLH’s Mission Services & Solutions operating unit led by Helene
Fisher (former US Army Signal Corps). IBA’s current president, Mary
Dowdall, will remain with DLH in leadership of the IBA
organization.
“IBA complements our capabilities and enhances
our readiness profile for military and other agency business
through research, analytics, and advancing technologies,” said
Zachary Parker, DLH President & CEO. “For several decades IBA
has leveraged its expertise in program management, research and
engineering, and health data analytics to expand its business in
support of agencies in the Military Health System (MHS). We are
confident that IBA will strengthen our growth outlook and bring new
opportunities in technology-enabled healthcare solutions. I am
proud to have IBA join the DLH family of operations.”
"We believe that DLH is an ideal partner for
IBA, from both a business and cultural perspective" added Mary
Dowdall, President of Irving Burton Associates. "Our employees will
appreciate and embrace the collective spirit, shared objectives,
and expanding opportunities that our combined organization will
bring. We look forward to aligning our mutual commitment and
mission-driven focus to deliver technology-enabled services to
federal government agencies.”
DLH financed the acquisition through an
amendment to its existing secured credit facility. Borrowing
availability was provided by debt prepayments facilitated by the
Company’s ongoing cash generation. First National Bank of
Pennsylvania acted as agent, and F.N.B. Capital Markets and M&T
Bank acted as joint lead arrangers. The credit facility was
comprised of a syndicated term loan of $70 million and revolving
credit facility of $25 million. All bank members of the
syndicated credit facility committed funding to their original loan
amounts. Additional terms of the transaction and financing
arrangements will be available in the Company’s SEC filings.
AdvisorsBaird served as
financial advisor to DLH. Holland & Knight, LLP and Becker
& Poliakoff LLP served as legal advisors to DLH as part of this
transaction. Baker Tilly and the Lockton Companies provided
consulting services to DLH in connection with the
acquisition. KippsDeSanto & Co. served as financial
advisor to IBA.
Conference Call DLH plans to
host a conference call on Wednesday, October 7, at 9:00 am Eastern
to review this transaction. A presentation/webcast will be
available on the Company’s website, and the call may be accessed by
dialing 888-347-5290 (or 412-317-5256) code
10148498. About
DLHDLH (NASDAQ: DLHC) serves federal government clients
throughout the United States and abroad delivering technology
enabled solutions in key health and human services programs. The
Company's core competencies include secure data analytics, clinical
trials and laboratory services, case management, performance
evaluation, system modernization, operational logistics and
readiness, and strategic digital communications. DLH has
approximately 2,000 employees serving numerous government agencies.
For more information, visit the corporate website at
www.dlhcorp.com
About IBAIrving Burton
Associates (IBA) is a federal services provider specializing in
technology, business solutions, and research and engineering. For
more than 40 years, IBA has provided innovative service solutions
to meet the nation’s most pressing challenges. IBA is headquartered
in Falls Church, VA. Find out more at www.ibacorp.us
Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995:This press
release may contain forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These
statements relate to future events or DLH`s future financial
performance. Any statements that refer to expectations, projections
or other characterizations of future events or circumstances or
that are not statements of historical fact (including without
limitation statements to the effect that the Company or its
management “believes”, “expects”, “anticipates”, “plans”, “intends”
and similar expressions) should be considered forward looking
statements that involve risks and uncertainties which could cause
actual events or DLH’s actual results to differ materially from
those indicated by the forward-looking statements. Forward-looking
statements in this release include, among others, statements
regarding estimates of future revenues. These statements reflect
our belief and assumptions as to future events that may not prove
to be accurate. Our actual results may differ materially from such
forward-looking statements made in this release due to a variety of
factors, including: the outbreak of the novel coronavirus
(“COVID-19”), including the measures to reduce its spread, and its
impact on the economy and demand for our services, are uncertain,
cannot be predicted, and may precipitate or exacerbate other risks
and uncertainties; the failure to achieve the anticipated benefits
of the IBA acquisition (including anticipated future financial
operating performance and results); diversion of management’s
attention from normal daily operations of the business and the
challenges of managing larger and more widespread operations
resulting from the acquisition; the inability to retain IBA
employees and customers; contract awards in connection with
re-competes for present business and/or competition for new
business; the risks and uncertainties associated with client
interest in and purchases of new services; compliance with new bank
financial and other covenants; changes in client budgetary
priorities; government contract procurement (such as bid protest,
small business set asides, loss of work due to organizational
conflicts of interest, etc.) and termination risks; the ability to
successfully integrate the operations of IBA and any future
acquisitions; and other risks described in our SEC filings. For a
discussion of such risks and uncertainties which could cause actual
results to differ from those contained in the forward-looking
statements, see “Risk Factors” in the Company’s periodic reports
filed with the SEC, including our Annual Report on Form 10-K for
the fiscal year ended September 30, 2019, as well as subsequent
reports filed thereafter. The forward-looking statements contained
herein are not historical facts, but rather are based on current
expectations, estimates, assumptions and projections about our
industry and business. Such forward-looking statements are made as
of the date hereof and may become outdated over time. The Company
does not assume any responsibility for updating forward-looking
statements, except as may be required by law.
CONTACTS:
INVESTOR RELATIONSContact: Chris WittyPhone:
646-438-9385Email: cwitty@darrowir.com
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