KeyW to Acquire Sotera Defense for USD235 million

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Deal Facts

Deal Type: Acquisition
Deal Sub-Type: Majority Acquisition
Acquirer: KEYW Corporation
Target: Sotera Defense Solutions, Inc.
Vendor: Ares Management, L.P.
Deal Country: United States of America
Deal Status: Announced
Announced Date: 08-Mar-2017
Expected Closing Date: 30-Jun-2017
Deal Value (USD m): 235.00

Deal in Brief

The KeyW Corporation, a provider of cyber superiority, cyber security and geospatial intelligence solutions, has signed a definitive agreement to acquire Sotera Defense Solutions, Inc. (formerly Global Defense Technology & Systems, Inc.), a security technology company, in an all-cash transaction valued at approximately USD235 million. Both the companies are based in the US.

Following the transaction, Sotera will become a wholly-owned subsidiary of KeyW. KeyW and Sotera will offer a portfolio of solutions, including cyber, geospatial, cloud and data analytics, engineering, analysis and operations, and machine learning; and the combined company will have its headquarter in Hanover, US.

Sotera is owned by the funds managed by Ares Management, L.P., a US-based asset management firm.

KeyW intends to fund the transaction with proceeds from a newly secured credit facility arranged by RBC Capital Markets, LLC and cash on hand.

The transaction is expected to be immediately accretive to 2017 adjusted earnings per share (EPS) and accretive to 2018 generally accepted accounting principles (GAAP) EPS.

RBC Capital Markets, LLC and Guggenheim Securities, LLC are acting as financial advisors, while Morrison & Foerster LLP and Holland & Knight LLP are acting as legal advisors to KeyW.

Macquarie Capital Group Limited and Sagent Advisors, Inc. are acting as financial advisors, while Proskauer Rose LLP is acting as legal advisor to Sotera.

The transaction is expected to close in the second quarter of 2017.

Deal Rationale

The transaction will enable KeyW to increase its growth plans.

The transaction will provide new and enhanced access to agencies within the KeyW’s existing IC portfolio, adds significant scale, creating unique, IC-focused provider, and will adds new and complementary capabilities for IC customers.

It will also enable KeyW and Sotera to expand their footprints among intelligence community (IC) customers and leverage capabilities to benefit existing and new customers, as well as add scale.

Companies Involved

Acquirers

Company Name: KEYW Corporation

Address: Suite A, 1334 Ashton Road, Hanover

Country: United States of America

Phone: 1 443 2705300
Fax: 1 443 2705301

Vendors

Company Name:
Address: 2000 Avenue of the Stars, 12th Floor, Los Angeles
Country: United States of America
Phone: 1 310 2014100

Targets

Address: 2121 Cooperative Way, Suite 400, Herndon
Country: United States of America
Phone: 1 703 2308200
Fax: 1 703 8809300

Financial Information

Deal Financials
Deal Value (US$ m) : 235.00

 Payment Information

KEYW Corporation
Cash : 100.00 %
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