SRA International, Inc. (NYSE: SRX), a leading provider of
technology and strategic consulting services and solutions to
government organizations and commercial clients, today announced it
has entered into a definitive merger agreement under which SRA will
be acquired by an affiliate of Providence Equity Partners in an
all-cash transaction.
Pursuant to terms of the agreement, SRA shareholders will
receive $31.25 in cash for each share of common stock, for a total
value of approximately $1.88 billion. The transaction represents a
10.2% premium based on the closing price of $28.36 on March 31,
2011 and a premium of 52.8% over the closing price of $20.45 on
Dec. 31, 2010, the company’s unaffected share price.
SRA’s Board of Directors – acting upon the recommendation of a
Special Committee consisting of independent and disinterested
Directors and in conjunction with the Special Committee’s outside
financial and legal advisors – unanimously approved the transaction
and recommended that SRA shareholders approve the transaction, with
SRA Founder and Chairman Dr. Ernst Volgenau abstaining.
Dr. Volgenau said, “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. We also look forward to partnering with
Providence, whose values and culture are consistent with SRA’s
longstanding ethic of honesty and service. We believe these
characteristics are critical as we continue to build SRA and
sustain its competitive positioning for the future.”
Julie Richardson, a Managing Director at Providence, said “The
government information services market is a highly attractive area
of investment for Providence, and SRA is a leading innovator within
the national security, civil government, global health and
intelligence sectors. Under Ernst’s remarkable stewardship since
founding the company over 32 years ago, SRA has built a strong
culture of integrity and a sterling reputation for high-quality
service that differentiates the company from its competitors and
positions them well to compete and win in this market. We are
excited about partnering with Ernst and the SRA management team to
build lasting value for the company, its employees and its
customers.”
Following the completion of the transaction, SRA will remain
headquartered in Fairfax, Va., and maintain its offices around the
world. The company will continue to be led by its existing senior
management team. Dr. Volgenau will continue to serve as Chairman of
the SRA Board.
The transaction is subject to approval of a majority of the
outstanding shares of SRA, as well as a majority of the outstanding
shares of SRA Class A Common Stock (excluding shares beneficially
owned by Dr. Volgenau), and other customary closing conditions and
regulatory approvals. The transaction is anticipated to close
during the first quarter of the SRA 2012 fiscal year, which begins
on July 1, 2011. Upon closing, SRA will become a privately held
company. At the request of Providence, Dr. Volgenau will roll over
a portion of his existing SRA equity interest and continue to be a
significant shareholder in the privately held company.
Dr. Volgenau, who owns a total of approximately 11.8 million
shares of Class A and Class B common stock, representing 21% of
total shares outstanding and 71% of voting rights, has agreed to
vote his shares for approval of the merger. However, in the event
that the merger agreement is terminated, Dr. Volgenau will be
released from this obligation.
Under the terms of the merger agreement, SRA may solicit
acquisition proposals from third parties for a 30-day “go-shop”
period from the date of the merger agreement. It is not anticipated
that any developments will be disclosed with regard to this process
unless the SRA Board of Directors makes a decision with respect to
a potential superior proposal. The merger agreement provides
Providence with a customary right to match a superior proposal.
There is no guarantee that this process will result in a superior
proposal.
The agreement between SRA and Providence concludes a process
that began in October 2010, when SRA’s Board of Directors formed a
Special Committee of Independent Directors to explore the
possibility of an acquisition. At that time, the Special Committee
retained Houlihan Lokey as its outside financial adviser and
Kirkland & Ellis LLP as its special counsel. Both firms are
independent of SRA management. SRA, acting through the Special
Committee, conducted a comprehensive process that included
strategic and financial buyers. This process resulted in the
current agreement with Providence.
Given published speculations over the past four months, it
should be noted that SRA never received, and thus never rejected,
an offer at an erroneously reported aggregate value of $2 billion.
Indeed, the only figure ever communicated to SRA from that third
party was a December 1, 2010 highly conditioned expression of
interest in the range of $30-$31 per share which did not
materialize.
The transaction will be financed through a combination of equity
and debt. The debt financing is provided by BofA Merrill Lynch and
Citigroup Global Markets Inc.
Houlihan Lokey acted as financial advisor and Kirkland &
Ellis acted as legal advisor to the Special Committee of SRA’s
Board of Directors in connection with the transaction. Citigroup
Global Markets Inc. and BofA Merrill Lynch acted as financial
advisers and Debevoise & Plimpton served as legal counsel to
Providence in connection with the transaction.
About SRA International, Inc.
SRA and its subsidiaries are dedicated to solving complex
problems of global significance for government organizations and
commercial clients serving the national security, civil government
and global health markets. Founded in 1978, the company and its
subsidiaries have expertise in such areas as air surveillance and
air traffic management; contract research organization (CRO)
services; cyber security; disaster response planning; enterprise
resource planning; environmental strategies; IT systems,
infrastructure and managed services; learning technologies;
logistics; public health preparedness; public safety; strategic
management consulting; systems engineering; and wireless
integration.
SRA and its subsidiaries employ more than 7,300 employees
serving clients from its headquarters in Fairfax, Va., and offices
around the world. For additional information on SRA, please visit
www.sra.com.
About Providence Equity Partners
Providence Equity Partners is the leading global private equity
firm specializing in equity investments in media, entertainment,
communications and information services companies around the world.
The principals of Providence manage funds with over $23 billion in
equity commitments and have invested in more than 100 companies
operating in over 20 countries since the firm’s inception in 1989.
Significant existing and prior investments include Altegrity,
Archipelago Learning, Bresnan Broadband Holdings, Casema, Com Hem,
Digiturk, Education Management Corporation, eircom, Hulu,
ikaSystems Corporation, Idea Cellular, Kabel Deutschland, NexTag,
PanAmSat, ProSiebenSat.1, Recoletos, TDC, Univision, VoiceStream
Wireless, Warner Music Group, and Yankees Entertainment and Sports
Network. Providence is headquartered in Providence, RI (USA) and
has offices in New York, London, Los Angeles, Hong Kong and New
Delhi. Visit www.provequity.com for more information.
Important Additional Information
SRA will be filing a proxy statement and other relevant
documents concerning the acquisition with the SEC. This press
release does not constitute a solicitation of any vote or approval.
We urge investors to read the proxy statement and any other
documents to be filed with the SEC in connection with the
acquisition or incorporated by reference in the proxy statement
because they will contain important information.
Investors will be able to obtain these documents free of charge
at the SEC’s Web site (www.sec.gov). In addition, documents filed
with the SEC by SRA will be available free of charge from SRA
International, Inc., c/o Investor Relations, 4350 Fair Lakes Court,
Fairfax, VA 22033, or by telephone at 703.502.7731 or by email to
Investor@sra.com.
The directors, executive officers and certain other members of
management and employees of SRA may be deemed “participants” in the
solicitation of proxies from stockholders of SRA in favor of the
acquisition. Information regarding the persons who may, under the
rules of the SEC, be considered participants in the solicitation of
the stockholders of SRA in connection with the proposed acquisition
will be set forth in the proxy statement and the other relevant
documents to be filed with the SEC. You can find information about
the SRA’s executive officers and directors in its Annual Report on
Form 10-K for the year ended June 30, 2010 and in its definitive
proxy statement filed with the SEC on September 17, 2010.
Forward-Looking Statements
Any statements in this press release about prospective
performance and plans for SRA, the expected timing of the
completion of the merger and the ability to complete the merger,
and other statements containing the words “estimates,” “believes,”
“anticipates,” “plans,” “expects,” “will,” and similar expressions,
constitute forward-looking statements within the meaning of The
Private Securities Litigation Reform Act of 1995. Factors or risks
that could cause our actual results to differ materially from the
results we anticipate include, but are not limited to: (i) the
occurrence of any event, change or other circumstances that could
give rise to the termination of the merger agreement; (ii) the
inability to complete the merger due to the failure to obtain
shareholder approval for the merger or the failure to satisfy other
conditions to completion of the merger, including that a
governmental entity may prohibit, delay or refuse to grant approval
for the consummation of the transaction; (iii) the failure to
obtain the necessary financing arrangements set forth in the debt
and equity commitment letters delivered pursuant to the merger
agreement, (iv) risks related to disruption of management’s
attention from SRA’s ongoing business operations due to the
transaction; (v) the effect of the announcement of the
acquisition on SRA’s relationships with its customers, operating
results and business generally; and (vi) the requirement of
approval of the acquisition by a majority of the outstanding shares
of SRA Class A Common Stock (excluding shares beneficially owned by
Dr. Volgenau).
Actual results may differ materially from those indicated by
such forward-looking statements. In addition, the forward-looking
statements included in this press release represent our views as of
March 31, 2011. We anticipate that subsequent events and
developments will cause our views to change. However, while we may
elect to update these forward-looking statements at some point in
the future, we specifically disclaim any obligation to do so. These
forward-looking statements should not be relied upon as
representing our views as of any date subsequent to March 31, 2011.
Additional factors that may cause results to differ materially from
those described in the forward-looking statements are set forth in
the Annual Report on Form 10-K of SRA for the fiscal year ended
June 30, 2010, which was filed with the SEC on August 12, 2010,
under the heading “Item 1A-Risk Factors,” and in subsequent reports
on Forms 10-Q and 8-K filed with the SEC by SRA.
Photos/Multimedia Gallery Available:
http://www.businesswire.com/cgi-bin/mmg.cgi?eid=6668265&lang=en
Sra (NYSE:SRX)
Historical Stock Chart
From May 2024 to Jun 2024
Sra (NYSE:SRX)
Historical Stock Chart
From Jun 2023 to Jun 2024