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Tuesday, December 7, 2021
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PAE Enters into Agreement to be Acquired by Amentum

Under the terms of the merger agreement, PAE shareholders will be entitled to receive $10.05 per share in cash upon the consummation of the transaction.

PAE Incorporated, a global company that provides a broad range of operational solutions and outsourced services to meet critical and enduring needs of the U.S. government, other allied governments, international organizations and companies, today announced that it has entered into a definitive agreement to be acquired by an affiliate of Amentum Government Services Holdings LLC in an all-cash transaction valued at approximately $1.9 billion, including the assumption of debt and certain fees.

Amentum is a global technical and engineering services partner supporting critical programs of national significance across defense, security, intelligence, energy, and environment.

Under the terms of the merger agreement, PAE shareholders will be entitled to receive $10.05 per share in cash upon the consummation of the transaction, which is subject to shareholder approval and other customary closing conditions, including regulatory approvals. The purchase price represents an approximately 70% premium over PAE’s closing price on October 22, 2021, the last trading day prior to the announcement of the transaction. The exercise price of PAE’s outstanding warrants will be adjusted pursuant to PAE’s warrant agreement unless the warrants are called for redemption pursuant to such warrant agreement.

“By achieving an approximately 70% premium over PAE’s closing price on October 22, 2021, PAE’s Board believes this transaction will deliver significant value for PAE’s shareholders. This is a historic milestone in PAE’s legacy of service to the U.S. Government spanning over 66 years,” said Marshall Heinberg, Chairman of the Board of Directors. “I want to commend Interim President and CEO Charlie Peiffer and the rest of the PAE management team for their outstanding work in getting the transaction to this point given many competing demands,” Heinberg said.

“I believe joining the capabilities and resources of PAE and Amentum will benefit the customers and employees of both companies. This transaction creates new opportunities for the technology innovation our customers need to drive their critical missions,” said PAE Interim CEO and President Charlie Peiffer. “Aided by an attractive demand environment and PAE’s diversification across its customer base, contract portfolio and geographic reach, combining with Amentum is expected to provide our customers a wide array of capabilities and services via a broad range of contracting vehicles. Furthermore, this transaction should provide strong growth opportunities in terms of career development for our employees.”

“Having a similar mission-oriented culture and creating new opportunities for our employees while maximizing shareholder value were of significant importance in the selection criteria for partnership in PAE’s next chapter,” said Peiffer. “We believe that joining with Amentum will enable PAE’s talented workforce to deliver even more innovative solutions to our customers.”

PAE’s Board of Directors has unanimously recommended that its stockholders approve and adopt the merger agreement with Amentum. However, during a “go-shop” period effective through November 29, 2021, PAE may actively solicit alternative acquisition proposals from third parties in accordance with the terms of the merger agreement. The merger agreement includes a “break fee” in the event PAE terminates the merger agreement, and this “break fee” will be discounted in the event of a termination during the “go-shop” period. PAE does not intend to disclose developments with respect to the solicitation process unless and until it determines such disclosure is appropriate or is otherwise required. Following the expiry of the “go-shop” period and the filing of the definitive proxy statement with the U.S. Securities and Exchange Commission (“SEC”) and subsequent mailing to stockholders, a special meeting of PAE’s stockholders will be held as soon as practicable to approve and adopt the merger agreement. The transaction is not subject to any financing conditions. Upon completion of the acquisition, which is expected to occur by the end of the first quarter 2022, PAE will become wholly owned by an affiliate of Amentum.

An affiliate of Platinum Equity, PE Shay Holdings, LLC, which owns approximately 22.5% of PAE’s outstanding shares, has entered into an agreement with the Company to vote its shares in accordance with the recommendation of PAE’s Board with respect to the proposed transaction.

PAE will file a current report on Form 8-K with the SEC containing a summary of terms and conditions of the proposed transaction.

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