DynCorp Purchased by Cerberus: Getting Specific

DynCorp International, Inc. (NYSE: DCP) has entered into a definitive agreement to be acquired by affiliated funds and/or managed accounts of private investment firm Cerberus Capital Management, L.P. (“Cerberus“) in a transaction with a total value of approximately $1.5 billion, including the assumption of debt.

The move was agreed upon by DynCorp International's Board of Directors with the recommendation that DynCorp International's stockholders approve the transaction.

Stockholders will receive $17.55 in cash for each share of DynCorp International common stock they own, representing a premium of approximately 49% percent, based on the closing trading price of $11.75 on April 9, 2010, and approximately 50% over the 90-day average closing trading price.

Cerberus has obtained fully committed financing for the transaction, consisting of a combination of equity financing from Cerberus and debt financing from Bank of America Merrill Lynch, Citigroup Global Markets Inc., Barclays Bank PLC, and Deutsche Bank Securities Inc. Each institution acted as a financial advisor to Cerberus as well.

“We are very excited about today’s announcement and what it means for DynCorp International, our employees and our customers going forward,” said William Ballhaus, CEO.  “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. 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 pleased to partner with the outstanding management team and dedicated employees of DynCorp International,“ said Timothy F. Price, Cerberus managing director.  “This exciting news underscores our successful track record in the government services sector and furthers our goal of continuing to grow our portfolio in this area. DynCorp International has a demonstrated history of strong customer oriented performance, from a unique global platform.  We are confident that DynCorp International will continue to serve its customers well while expanding its service offerings to current and prospective customers.“

Here are the specific details of the move as stated by DynCorp:

“Completion of the transaction is subject to customary conditions, including approval of the merger by the holders of a majority of the outstanding shares of DynCorp International's common stock and regulatory approvals including expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.  Assuming the satisfaction of conditions, the transaction is expected to close in the third or fourth calendar quarter of 2010. Upon completion of the merger, DynCorp International will become a private company, wholly-owned by Cerberus.

Under the terms of the agreement, DynCorp International may solicit alternative proposals from third parties for the 28-day period following the signing and intends to consider any such proposals.  There can be no assurance that the solicitation of such proposals will result in an alternative transaction. In addition, DynCorp International may, at any time, subject to the terms of the merger agreement, respond to unsolicited proposals.

Affiliates of Veritas Capital Fund Management, L.L.C. have executed a Voting Agreement pursuant to which they have agreed to vote shares owned by them representing, in the aggregate, 34.9% of the outstanding shares of DynCorp International in favor of the transaction.

Goldman, Sachs & Co. acted as financial advisor to DynCorp International. Schulte Roth & Zabel LLP acted as outside legal counsel to the Company and Board of Directors of the Company. Richards, Layton & Finger, P.A. acted as special outside counsel to the Board of Directors of the Company.

Evercore Partners along with the previously mentioned Banks acted as financial advisors to Cerberus. Akin Gump Strauss Hauer & Feld LLP and Jenner & Block, LLP acted as outside legal counsel to Cerberus.”

ExecutiveBiz Logo

Sign Up Now! ExecutiveBiz provides you with Daily Updates and News Briefings about Technology


Written by Neel Mehta

Sophistication, Growth in Cyber Attacks Biggest Threat to IT Professionals
Featured Job- Cyber Security Analyst with Booz Allen