Engility To Buy Dynamics Research For $11.50/shr In Cash - Quick Facts

(RTTNews) - Engility Holdings Inc. (EGL) announced Monday that it agreed to acquire Dynamics Research Corp. (DRCO), a U.S. government services, information technology and management consulting firm with leading capabilities in Healthcare, Homeland Security, Research & Development, Intelligence, Surveillance & Reconnaissance or ISR, Financial Regulation & Reform, and Defense Readiness, Logistics and Command, Control & Communications or C3.

The transaction was unanimously approved by the boards of directors of both companies.

As per the terms of the agreement, Engility will commence a tender offer for all outstanding shares of Dynamics Research Corp. or DRC common stock at a price of $11.50 in cash for each outstanding share.

The transaction is expected to be accretive to Engility's 2014 earnings and significantly accretive to 2015 earnings and beyond. The acquisition is anticipated to close during the first quarter of 2014, subject to customary closing conditions and regulatory approval.

Founded in 1955, DRC has supported the government's highest priority programs in the Science and Engineering, IT, and technical and management consulting markets. DRC has more than 1,100 employees, is a prime contractor on approximately 80% of its work, and has a track record of solid financial performance, with estimated revenue in 2013 of $274 million- $277 million and adjusted EBITDA of $24.3 million- $24.7 million.

"DRC's leadership team has successfully repositioned the company in high priority market areas. The company's impressive contract portfolio significantly expands our combined market opportunity in areas where we currently do not have an existing customer relationship or where we are currently underrepresented. I look forward to welcoming DRC's highly-talented employees to the Engility team," said Engility President and CEO Tony Smeraglinolo.

Completion of the transaction is subject to, among other things, the valid tender without withdrawal of a two-thirds majority of the outstanding shares of DRC common stock, regulatory approvals including approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary closing conditions.

Following completion of the tender offer, subject to customary exceptions, any shares of DRC stock not tendered will be converted into the right to receive the same price per share paid by Engility in the tender offer. The transaction is not subject to any financing condition, Engility said.