PAE to Expand IC Portfolio With CENTRA Technology Acquisition

PAE announced on October 26 that its subsidiary has entered into a definitive agreement to acquire CENTRA Technology, Inc., a provider of intelligence support, information analytics, engineering services and other advanced technology solutions, for approximately $208 million (net of tax benefits) in cash. This represents a transaction multiple of approximately 8.8x CY2020 adjusted EBITDA, adjusted for the net present value of tax assets and estimated cost synergies.

CENTRA is an intelligence analysis service provider focused on providing mission critical services to the intelligence community and other U.S. national and homeland security customers. Headquartered in Burlington, Massachusetts, CENTRA has more than 760 employees, a majority of whom have top secret clearances with subject matter expertise across a broad range of critical national security issues.

PAE President and CEO John Heller said the acquisition firmly aligns with PAE’s strategy of expanding the business to higher-margin market areas. “By acquiring CENTRA, PAE realizes a significant milestone in the execution of our strategic growth plan to be a provider of innovative, higher margin, knowledge-based offerings in attractive, resilient end markets. This exciting opportunity builds on our intelligence analysis capabilities while increasing customer access, accelerating growth and enhancing shareholder value. Additionally, the acquisition of CENTRA is expected to be accretive to adjusted EBITDA margins and free cash flow.”

The transaction increases PAE’s total addressable market by approximately $36 billion in annual spending, and provides PAE with the ability to actionably pursue several large contracts in new market segments. It will also bring new, value-add service and technology offerings to the portfolio; including intelligence analysis, communication systems integration and research and development services.

The transaction has been unanimously approved by the boards of directors of both PAE and CENTRA and is expected to close in the fourth quarter of 2020, subject to regulatory approvals and customary closing conditions. PAE expects to fund the purchase price of approximately $208 million with cash on hand and utilization of its delayed draw term loan.

Morgan, Lewis & Bockius LLP acted as legal advisor and Renaissance Strategic Advisors, LLC acted as strategic advisor to PAE in connection with the transaction. Greenberg Traurig, LLP acted as legal advisor and Citizens Capital Markets, Inc. acted as financial advisor to CENTRA in connection with the transaction.

Read the announcement at PAE

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The Government Technology & Services Coalition's Homeland Security Today (HSToday) is the premier news and information resource for the homeland security community, dedicated to elevating the discussions and insights that can support a safe and secure nation. A non-profit magazine and media platform, HSToday provides readers with the whole story, placing facts and comments in context to inform debate and drive realistic solutions to some of the nation’s most vexing security challenges.

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