11-06-2010, 09:07 PM
Mergers & Acquisitions
Cerberus to Buy DynCorp for $1.5 Billion
April 12, 2010, 9:54 am![[Image: icon_handshake75x75.jpg]](http://graphics8.nytimes.com/images/blogs/dealbook/icon_handshake75x75.jpg)
DynCorp International, the private military contractor, said on Monday it has agreed to sell itself to Cerberus Capital Management for $1.5 billion, as the private equity industry continues to return to its core business of deal-making.
Cerberus will pay $17.55 a share for DynCorp, a 49 percent premium to Friday’s closing price of $11.75. DynCorp now has 28 days under a “go-shop” provision within the deal agreement to find a higher and better offer.
While DynCorp has continued to win new contracts from the federal government, it has also been the subject of controversy over the years for its assignments in Iraq.
“I believe that under this partnership with Cerberus, DynCorp International will be able to build on our extensive heritage and successful performance to continue to achieve our growth objectives,” William L. Ballhaus, DynCorp’s chief executive, said in a statement. “Importantly, this transaction is a major milestone for DynCorp International’s continued leadership in serving our customers and supporting U.S. national security and foreign policy objectives.”
Cerberus is no stranger to companies with ties to the military: it owns Freedom Group, one of the biggest assemblages of gun manufacturers. Freedom is in the process of going public.
As part of the transaction, Veritas Capital, DynCorp’s biggest shareholder and its onetime financial sponsor, has agreed to vote its 34.9 percent stake in favor of the Cerberus deal.
As the credit markets have roared back to life, banks have resumed making loans to finance private equity firms, bringing back a fee-laden business (albeit one that hurt them during the financial crisis). Cerberus has received financing commitments from Bank of America Merrill Lynch, Citigroup, Barclays, and Deutsche Bank.
DynCorp was advised by Goldman Sachs and the law firm Schulte Roth & Zabel, while its board was advised by the law firm Richards, Layton & Finger.
Cerberus was advised by Evercore Partners, the aforementioned lenders and the law firms Akin Gump Strauss Hauer & Feld and Jenner & Block.
Go to DynCorp Press Release via Business Wire »
Cerberus to Buy DynCorp for $1.5 Billion
April 12, 2010, 9:54 am
DynCorp International, the private military contractor, said on Monday it has agreed to sell itself to Cerberus Capital Management for $1.5 billion, as the private equity industry continues to return to its core business of deal-making.
Cerberus will pay $17.55 a share for DynCorp, a 49 percent premium to Friday’s closing price of $11.75. DynCorp now has 28 days under a “go-shop” provision within the deal agreement to find a higher and better offer.
While DynCorp has continued to win new contracts from the federal government, it has also been the subject of controversy over the years for its assignments in Iraq.
“I believe that under this partnership with Cerberus, DynCorp International will be able to build on our extensive heritage and successful performance to continue to achieve our growth objectives,” William L. Ballhaus, DynCorp’s chief executive, said in a statement. “Importantly, this transaction is a major milestone for DynCorp International’s continued leadership in serving our customers and supporting U.S. national security and foreign policy objectives.”
Cerberus is no stranger to companies with ties to the military: it owns Freedom Group, one of the biggest assemblages of gun manufacturers. Freedom is in the process of going public.
As part of the transaction, Veritas Capital, DynCorp’s biggest shareholder and its onetime financial sponsor, has agreed to vote its 34.9 percent stake in favor of the Cerberus deal.
As the credit markets have roared back to life, banks have resumed making loans to finance private equity firms, bringing back a fee-laden business (albeit one that hurt them during the financial crisis). Cerberus has received financing commitments from Bank of America Merrill Lynch, Citigroup, Barclays, and Deutsche Bank.
DynCorp was advised by Goldman Sachs and the law firm Schulte Roth & Zabel, while its board was advised by the law firm Richards, Layton & Finger.
Cerberus was advised by Evercore Partners, the aforementioned lenders and the law firms Akin Gump Strauss Hauer & Feld and Jenner & Block.
Go to DynCorp Press Release via Business Wire »
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