The all-stock transaction will officially close in the third quarter of 2022 and is intended to create a more wide-ranging revenue stream in terms of locations, customers and contract types from the Department of Defense and other branches of government, the companies announced Monday.
Together, Vectrus and Vertex are expected to provide an arsenal of integrated services and full-lifecycle technological strategies primed to address national security and modernization obligations.
Currently, Vectrus specializes in base operations services, supply chain and logistics, information technology and security. Meanwhile, Vertex’s core capabilities include aviation maintenance, systems engineering and integration and training programs for both public and private sector clientele.
“This highly strategic transaction builds on both companies’ accomplishments over the last several years and significantly accelerates our ability to deliver converged solutions,” said Chuck Prow, CEO of Vectrus and an eight-time winner of the Wash100 Award.
Prow will become CEO of the combined organization once the deal officially closes. Vectrus’ current chief financial officer, Susan Lynch, will continue in this role for the new company while the remainder of the executive lineup will be populated by members of both companies.
Vertex CEO and President Ed Boyington commented, “Vertex and Vectrus share mission-oriented foundations and cultural alignment. By joining forces with Vectrus, we will be better positioned to help the Department of Defense and government agencies achieve their objectives, and in the process, create a stronger organization.”
The two companies’ combined assets amount to a pro forma revenue of about $3.4 billion and an Adjusted EBITDA of about $283 million for the 2021 fiscal year. The starting EBITDA margin profile will be 8 percent with expectations of growth.
There is also backlog amounting to $11.3 billion. After the merger is complete, Vertex shareholders have agreed to own 62 percent of the company while Vectrus shareholders will own about 38 percent.
A name for the new company will be decided when the deal closes in the third quarter of 2022. Headquarters will be based in northern Virginia.