KippsDeSanto & Co. Advises DLH Holdings Corporation on its Acquisition of Social & Scientific Systems

KippsDeSanto & Co. Advises DLH Holdings Corporation on its Acquisition of Social & Scientific Systems

KippsDeSanto & Co. is pleased to announce the acquisition of Social & Scientific Systems (“SSS”) by its client, DLH Holdings Corporation (“DLH” or the “Company”).

Headquartered in Atlanta, GA, DLH is a leading provider of innovative healthcare services and solutions to federal agencies.  The Company’s core competencies include assessment and compliance monitoring, business process outsourcing, health information technology systems integration, management, readiness and medical logistics, and pharmacy solutions.

Founded in 1978, SSS, is an experienced public health organization that provides scientific research, policy, and program evaluation to leading federal health customers.  SSS has established a strong brand within its core federal health customers and maintains a high degree of embeddedness supporting longitudinal public health studies that have spanned multiple decades.

Building off DLH’s successful acquisition of Danya in 2016, SSS adds further domain expertise (public health and life sciences), additional capabilities depth (data analytics, advanced research and IT), and scale.  SSS’ differentiated expertise, coupled with DLH’s existing business, strategically aligns to enhance the combined businesses’ organic growth across the fast-growing, multibillion-dollar federal healthcare market.

We believe this investment demonstrates several key trends in the healthcare M&A market:

  • Consolidation of government contractors of scale in niche, well-funded markets to drive mid-tier organic competitiveness
  • Value continues to be placed on companies with established client relationships, strong past performance, and solid revenue visibility on prime, unrestricted contracts
  • Attractiveness of deeply embedded and longstanding positions on well-funded programs

About KippsDeSanto & Co. KippsDeSanto & Co. is the largest independent investment banking firm exclusively focused on serving leading, growth-oriented Aerospace / Defense, Government Services and Technology companies.  We are focused on delivering exceptional M&A and Financing transaction results to our clients via leveraging our scale, creativity and industry experience.  We help market leaders realize their full strategic value.  Having advised on over 100 industry transactions, KippsDeSanto is recognized for our analytical rigor, market insight, and broad industry relationships.  There’s no substitute for experience.  For more information, visit www.kippsdesanto.com.

DLH Announces Acquisition of Social & Scientific Systems

ATLANTA, June 10, 2019 /PRNewswire/ — DLH Holdings Corp. (NASDAQ: DLHC) (“DLH” or the “Company”), a leading provider of innovative healthcare services and solutions to federal agencies, today announced that it has acquired privately-held Social & Scientific Systems (“SSS”) of Silver Spring, Maryland. The firm, with approximately 400 employees, is a leading public health service organization providing solutions in clinical and biomedical research, epidemiology, health policy, and program evaluation. SSS utilizes advanced research (including longitudinal studies), data analytics, and secure IT platform services to assist mission-critical public health agencies within the Department of Health & Human Services – including the National Institutes of Health (NIH) and the Centers for Medicare and Medicaid Services (CMS) – along with other healthcare-related institutions.

SSS was purchased for $70 million in cash, or $63 million net of transaction-related tax benefits worth $7 million on a net present value basis. DLH estimates that SSS will contribute approximately $65 million, on an annualized basis, to revenue of the Company going forward. The SSS backlog was approximately $346 million at closing, reflecting the long-term nature of its research and studies contracts. The funded component of acquired backlog was approximately $40 million. SSS will operate as a wholly-owned subsidiary of DLH Holdings Corp. and will be led by Kevin Beverly, its current President.

“This is an exciting addition to DLH and one that aligns perfectly with our strategy to expand the Company’s Public Health & Life Sciences focus area, diversifying our portfolio and bringing scale to support growth. In addition, we’ll augment our executive team with the high caliber leadership demonstrated by Kevin Beverly,” said Zachary Parker, DLH President & CEO. “With over 40 years in business, SSS is a nationally-recognized technology-enabled health research organization that collects, manages, and analyzes large-scale health data in support of critical public initiatives – complementing and broadening the markets we serve within the federal government.”

“I’m very pleased that SSS has found, in DLH, a great partner with which to continue delivering high quality health policy, data analytics, and public health services to federal agencies,” added Kevin Beverly, President of SSS. “Not only does DLH share a similar vision and corporate culture, but the Company is dedicated to improving the lives of citizens across the US and around the world. DLH has a reputation for providing a disciplined approach to achieving excellent customer service – including CMMI and ISO certifications – and valuing its employees. I look forward to working with Zach and his team as part of this dynamic new enterprise.”

DLH financed the acquisition through a new 5-year, $95 million, secured bank credit facility. First National Bank of Pennsylvania acted as agent, and F.N.B. Capital Markets and M&T Bank acted as joint lead arrangers. The facility is comprised of a syndicated term loan of $70 million and revolving credit facility of $25 million. The acquisition price and transaction expenses were funded by the term loan plus cash reserves of DLH, with the revolver available to support future cash needs. The interest rate applicable to borrowings is LIBOR plus a spread, based on the consolidated leverage ratio of DLH; at closing, the interest rate was 6.42%. Additional terms of the transaction and financing arrangements will be available in the Company’s SEC filings.

Advisors

KippsDeSanto & Co. served as financial advisor to DLH. Hogan Lovells US, LLP and Becker & Poliakoff LLP served as legal advisors to DLH as part of this transaction. The Avascent Group, Baker Tilly, and the Lockton Companies provided consulting services to DLH in connection with the acquisition.

Houlihan Lokey served as financial advisor to SSS; Saul Ewing Arnstein & Lehr, LLP served as legal advisor to SSS.

Conference Call and Webcast to be Held July 2, 2019

DLH management will discuss the acquisition of SSS on a conference call beginning at 10:00 a.m. Eastern Time on Tuesday, July 2, 2019. Interested parties may listen to the conference call by dialing 888-347-5290 and providing the operator with the conference ID 10132176. Presentation materials will also be posted on the Investor Relations section of the DLH website prior to the commencement of the conference call.

A digital recording of the conference call will be available for replay two hours after the completion of the call and can be accessed on the DLH Investor Relations website or by dialing 877-344-7529 and entering the conference ID 10132176.

About DLH

DLH (NASDAQ:DLHC) serves federal government clients throughout the United States and abroad delivering technology enabled solutions in key health and human services programs. The Company’s core competencies and consulting services include assessment and compliance monitoring, program management, health IT systems integration, data analytics, medical logistics, and pharmacy solutions. DLH has over 1,600 employees serving numerous government agencies. For more information, visit the corporate website at www.dlhcorp.com.

About Social & Scientific Systems

Social & Scientific Systems, based in Silver Springs, MD, is a public health research organization providing solutions in clinical and biomedical research, epidemiology and public health research, health policy, and program evaluation. The company, with approximately 400 employees, has offices in Durham, NC and Kampala, Uganda and was founded in 1978. Additional information can be found at www.s-3.com.

KippsDeSanto & Co. advises eGlobalTech on its Sale to Tetra Tech

KippsDeSanto & Co. advises eGlobalTech on its Sale to Tetra Tech

KippsDeSanto & Co. is pleased to announce the sale of our client, eGlobalTech, Inc. (“eGlobalTech” or the “Company”) to Tetra Tech, Inc. (“Tetra Tech”).

Based in Arlington, VA, eGlobalTech provides the federal government with innovative solutions that produce enduring results through its strategy, information technology, cloud and cybersecurity consulting services.  The Company is well-known for its ability to deliver advanced frameworks such as DevOps Factory®, artificial intelligence, data science, and cloud computing.  eGlobalTech also utilizes its eGT Labs to prototype emerging technology solutions and test new technologies, allowing the Company to quickly resolve complex issues for clients.

The transaction expands Tetra Tech’s capability set in artificial intelligence, data analytics, and advanced cybersecurity while providing new federal customers such as the U.S. Department of Health and Human Services.

We believe this transaction demonstrates several key trends in the government services M&A market:

  • Buyers are focused on M&A as an effective strategy to access next-generation IT capabilities including cybersecurity, cloud, and “as-a-service”
  • Deep domain and subject matter expertise, particularly when coupled with long-term relationships, are critical differentiators for sellers in a crowded M&A market
  • Continued M&A interest in high-end government technology solutions businesses from non-traditional buyers

About KippsDeSanto & Co. KippsDeSanto & Co. is the largest independent investment banking firm exclusively focused on serving leading, growth-oriented Aerospace/Defense, Government Services and Technology companies. We are focused on delivering exceptional M&A and Financing transaction results to our clients via leveraging our scale, creativity and industry experience. We help market leaders realize their full strategic value. Having advised on over 100 industry transactions, KippsDeSanto is recognized for our analytical rigor, market insight and broad industry relationships. There’s no substitute for experience. For more information, visit www.kippsdesanto.com.

Press Release

Tetra Tech Expands its Technology Solutions with Acquisition of eGlobalTech

PASADENA, California (BUSINESS WIRE) April. 3, 2019 – Tetra Tech, Inc. (NASDAQ: TTEK) announced today that it has acquired eGlobalTech, a high-end information technology (IT) solutions, cloud migration, cybersecurity, and management consulting firm based in Arlington, Virginia.

“The integration of emerging technology into our consulting practice continues to advance Tetra Tech’s ability to provide innovative solutions for our clients,” said Dan Batrack, Tetra Tech Chairman and CEO. “The addition of eGlobalTech and their laboratory incubator will allow us to pilot and apply exciting new techniques that incorporate artificial intelligence, data analytics, and advanced cybersecurity solutions for our government and commercial customers. Further, eGlobalTech brings us a suite of new federal clients, including the U.S. Department of Health and Human Services.”

Sanjiv Jain, eGlobalTech CEO, commented, “Our employees are excited about joining the Tetra Tech family and the opportunities that a broader, global platform offers. This merger will provide us with the high-end partnership, with a like-minded company, that will continue to advance the application of IT to more clients and projects, while providing extraordinary new opportunities for our employees to apply their expertise.”

The terms of the acquisition were not disclosed. eGlobalTech is joining Tetra Tech’s Government Services Group.

About eGlobalTech (www.eglobaltech.com)

eGlobalTech is a leading IT solutions, cybersecurity, and management-consulting firm based in Arlington, VA. Our focus is providing the federal government with innovative solutions that produce enduring results, leveraging cutting-edge technologies and frameworks such as DevOps Factory®, artificial intelligence, data science, and cloud computing.

About Tetra Tech

Tetra Tech is a leading provider of high-end consulting and engineering services for projects worldwide. With more than 17,000 associates working together, Tetra Tech provides clear solutions to complex problems in water, environment, infrastructure, resource management, energy, and international development. We are Leading with Science® to provide sustainable and resilient solutions for our clients. For more information about Tetra Tech, please visit tetratech.com, follow us on Twitter (@TetraTech), or like us on Facebook.

Any statements made in this release that are not based on historical fact are forward-looking statements. Any forward-looking statements made in this release represent management’s best judgment as to what may occur in the future. However, Tetra Tech’s actual outcome and results are not guaranteed and are subject to certain risks, uncertainties and assumptions (“Future Factors”), and may differ materially from what is expressed. For a description of Future Factors that could cause actual results to differ materially from such forward-looking statements, see the discussion under the section “Risk Factors” included in the Company’s Form 10-K and 10-Q filings with the Securities and Exchange Commission.

KippsDeSanto & Co. Advises Kforce, Inc. on its sale of Kforce Government Solutions to ManTech International Corporation

KippsDeSanto & Co. Advises Kforce, Inc. on its sale of Kforce Government Solutions to ManTech International Corporation

 KippsDeSanto & Co. is pleased to announce the sale of its client, Kforce Government Solutions (“KGS” or the “Company”), a subsidiary of Kforce Inc., (NASDAQ: KFRC), to ManTech International Corporation (“ManTech”).

KGS is a leading provider of high-end technology and business consulting solutions focused on improving mission effectiveness and operational efficiencies for federal agency customers. With more than two decades of experience, KGS has developed extensive domain knowledge and past performance in critical areas that include: enhancing mission-critical enterprise-wide systems and architectures via DevOps and Cloud migration; improving and automating essential business functions; developing data management strategies and applying analytics to business operations; and sustaining augmented financial reporting capabilities and performance. KGS has developed a long-standing and deep relationship with the Department of Veterans Affairs (“VA”) and is a prime holder on the highly sought-after Transformation Twenty-One Total Technology-Next Generation (“T4NG”) vehicle. Additional customers include Defense Threat Reduction Agency (“DTRA”), U.S. Air Force, and Defense Advanced Research Projects Agency (“DARPA”).

In 2018, KGS realized ~$98M of revenue, (which represented ~10% growth over 2017) and had ~$480M of backlog at the time of sale. ManTech paid $115M, or ~12x 2018 EBITDA for KGS. The acquisition expands ManTech’s presence within the VA and provides access to T4NG, as well as adding key customers and capabilities.

We believe this transaction demonstrates key trends in the government technology services M&A environment:

  • Prime, full & open positions on key vehicles, such as T4NG, continue to drive buyer interest and premium valuations
  • Buyers remain interested in well-positioned companies with strong backlog and financial momentum
  • Both buyers and sellers continue to gain value from corporate divestitures

About KippsDeSanto & Co. KippsDeSanto & Co. is the largest independent investment banking firm exclusively focused on serving leading, growth-oriented Aerospace / Defense, Government Services and Technology companies. We are focused on delivering exceptional M&A and Financing transaction results to our clients via leveraging our scale, creativity and industry experience. We help market leaders realize their full strategic value. Having advised on over 100 industry transactions, KippsDeSanto is recognized for our analytical rigor, market insight and broad industry relationships. There’s no substitute for experience. For more information, visit www.kippsdesanto.com.

Press Release

ManTech Completes Acquisition of KGS from Kforce

April 01, 2019 — ManTech completed its acquisition of KGS, a wholly-owned subsidiary of Kforce, Inc. Fairfax, Va.-based KGS provides technology solutions, transformation management, data management and analytics in support of federal health and defense missions. KGS has built a strong legacy of success with its customers particularly within the VA. The acquisition adds over 500 highly skilled employees to the ManTech team. In 2018, KGS generated approximately $98 million of revenue and has profitability comparable to ManTech.

The transaction does not include TraumaFX, Kforce’s federal government product business. Kforce is exploring strategic alternatives for that business. The operating results of KGS and TraumaFX are being reported as discontinued operations in the first quarter of 2019.

The combination will substantially increase ManTech’s footprint at the VA and enable ManTech to deliver services through the VA’s T4NG program. The T4NG program is a 10-year indefinite delivery, indefinite quantity (“IDIQ”) contract awarded by the VA Technology Acquisition Center (“TAC”) to help the VA transform its information technology programs.

ManTech President and CEO Kevin M. Phillips stated: “This acquisition is consistent with ManTech’s targeted federal civilian expansion strategy. We are pleased to welcome KGS’ talented employees, differentiated capabilities and important customers.”

KGS CEO Maureen Coyle stated: “We are thrilled to become a part of ManTech. This strategic combination will help us better meet our clients’ needs by broadening and deepening our solution offerings. Additionally, our cultures are well aligned, and our employees will benefit from expanded professional development opportunities.”

Kforce chairman and CEO David L. Dunkel stated: “We are excited for our KGS management team and associates to join forces with ManTech, which we expect will enhance KGS’s competitive positioning. The sale of KGS is the final step in our strategy to narrow our focus to domestic professional and technical staffing services and solutions.”

David M. Kelly, Kforce’s Chief Financial Officer, stated: “We expect to use the significant majority of the proceeds from this transaction for share repurchases and are pleased to announce that our Board of Directors approved an increase in our share buy-back authorization to $150.0 million. In anticipation of the closing of this transaction, we repurchased approximately 430 thousand shares for $14.6 million in the first quarter of 2019.”

KippsDeSanto & Co. advises Chemring Group PLC on the Sale of Chemring Military Products to Global Ordnance

KippsDeSanto & Co. advises Chemring Group PLC on the Sale of Chemring Military Products to Global Ordnance

KippsDeSanto & Co. is pleased to announce that it has advised on the sale of Chemring Military Products (“CMP” or the “Company”), a subsidiary of CHG Group, Inc., to Global Ordnance. The transaction expands Global Ordnance’s customer access, while helping our client, Chemring Group PLC (LSE:CHG), pursue its strategic initiatives of reshaping its defense and security portfolio.

Based in Perry, FL, CMP is one of the largest suppliers of non-standard ammunition and ordnance to the U.S. Government and allied militaries.  The Company has direct access to ammunition and weapon systems, including small, medium, and large caliber direct and indirect fire systems.  The Company also supplies law enforcement personnel with high-quality and competitively priced ammunition, pyrotechnics, and weapons systems.  CMP partners with domestic and international customers and utilizes its core competencies in supply chain and program management, quality assurance, and logistics to deliver best-value solutions.

We believe this transaction demonstrates several key trends in the aerospace and defense M&A environment:

  • Continued use of divestitures for portfolio shaping in line with shifting strategic plans
  • Intrinsic value of entrenched customer relationships throughout the defense industrial base
  • Driving value through the ability to realize operational and production synergies

About KippsDeSanto & Co. KippsDeSanto & Co. is the largest independent investment banking firm exclusively focused on serving leading, growth-oriented Aerospace / Defense, Government Services and Technology companies. We are focused on delivering exceptional M&A and Financing transaction results to our clients via leveraging our scale, creativity and industry experience. We help market leaders realize their full strategic value. Having advised on over 100 industry transactions, KippsDeSanto is recognized for our analytical rigor, market insight and broad industry relationships. There’s no substitute for experience. For more information, visit www.kippsdesanto.com.

PRESS RELEASE

Global Ordnance Acquires Chemring Military Products Inc.

SARASOTA, Fla., April 5, 2019 /PRNewswire/ — Global Ordnance LLC (“Global Ordnance”) announced it has completed the acquisition (“Acquisition”) of Chemring Military Products Inc. (“CMP”), a subsidiary company of Chemring Group PLC.

Global Ordnance is a veteran-owned small business that responds to the needs arising from critical missions of the US Government and its allies around the world. Since its inception in 2013, Global Ordnance has earned a reputation as a trusted and reliable partner of its customers, to include the US Special Operations Command and the US Army.

CMP procures and delivers worldwide US-standard and non-standard ammunition and weapons systems.  In FY2018, CMP generated revenues exceeding $111M with an operating profit of $10.5M.

Both Global Ordnance and CMP have been long-time suppliers of non-standard ammunition (NSA) and non-standard weapons (NSW) to US and foreign government entities. Today’s acquisition of CMP by Global Ordnance marks the synergy of two well-established organizations with complementary strengths and expertise. By absorbing the staff and contracts of CMP into its organization, Global Ordnance aims to improve its already stellar reputation as a reliable and dependable US Government business partner and a leading supplier of NSA and NSW. On a larger scale as a result of this purchase, the focus for Global Ordnance going forward remains on providing unmatched service and products to its current customers.

While today’s Acquisition magnifies the depth and breadth of an already strong NSA/NSW team and places Global Ordnance atop the NSA/NSW partner spectrum, it also allows Global Ordnance to broaden the extent of activities in the commercial space which the company entered in earnest within the last two years. Since then, Global Ordnance has become an exclusive US distributor of already established brands, such as Grand Power of Slovakia and Australian Outback Ammunition of Australia. The company plans to continue growing its presence and strengthening its competitive impact in the commercial US market.

For more information about defense sales, visit www.global-ordnance.com or inquire at info@global-ordnance.com.  For additional details regarding commercial sales, visit www.globalordnance.com or inquire at info@globalordnance.com.

Contact – Marc Morales, 941-896-2251, info@global-ordnance.com

 

KippsDeSanto’s DealView — Top 10 M&A Deals of the Quarter

KippsDeSanto & Co., a leading aerospace / defense and government technology solutions investment bank, would like to share its thoughts on the “Top 10 M&A Deals of the Quarter” for the period ended March 31, 2019.  The following table is our take on the most notable announced M&A transactions — not only based on size, but also on strategic importance and / or impact.

 The aerospace and defense deal of the quarter is the acquisition of Endeavor Robotic Holdings, Inc. (“Endeavor”) by FLIR systems, Inc. (“FLIR”) from private equity firm, Arlington Capital Partners, for an estimated $385 million in cash.  Based outside Boston and formerly known as iRobot Defense & Security, Endeavor has shipped more than 7,000 unmanned ground vehicles (“UGV”) to customers in over 55 countries.  Endeavor provides battle-tested, tactical UGVs for the global military, public safety, and critical infrastructure markets.  This transaction, along with FLIR’s recent acquisitions of Aeryon Labs and PROX Dynamics, has significantly expanded FLIR’s unmanned systems capabilities and aligns with its evolution from sensors to intelligent sensing and ultimately integrated solutions.  Upon closing of the acquisition, Endeavor will be part of the FLIR Government and Defense Business Unit’s Unmanned Systems and Integrated Solutions division.  The transaction is expected to be $0.03 dilutive to FLIR’s 2019 adjusted earnings per share, due to borrowing costs associated with funding the transaction, but accretive thereafter.

The government technology solutions deal of the quarter is ManTech, Inc.’s (NASDAQ:MANT) acquisition of Kforce Government Solutions, Inc. (“KGS”), a subsidiary of Kforce, Inc. (NASDAQ:KFRC).  KGS provides high-end technology and business consulting solutions aimed at improving mission effectiveness and operational efficiencies for Federal customers, primarily at the Department of Veteran Affairs (“VA”) and Department of Defense (“DoD”).  The $115 million all cash transaction was announced on March 1st.  This acquisition significantly expands ManTech’s footprint at the VA and gives ManTech access to KGS’ prime position on the VA’s 10-year, $22.3 billion, Transformation Twenty-One Total Technology Next Generation (“T4NG”) Indefinite Delivery Indefinite Quantity (“IDIQ”) program.  KGS adds ~500 skilled employees and ~$100 million of annual revenue to ManTech.  This transaction is yet another example of strategic buyers paying premium valuations for well positioned businesses that hold key contract vehicles, like T4NG.  KippsDeSanto & Co. acted as the exclusive financial advisor to KGS on this transaction.

Click to access KippsDeSanto’s 2019 Aerospace/Defense & Government Services M&A Survey

About KippsDeSanto & Co KippsDeSanto & Co. is the largest independent investment banking firm exclusively focused on serving leading, growth-oriented Aerospace/Defense, Government Services and Technology companies.  We are focused on delivering exceptional M&A and Financing transaction results to our clients via leveraging our scale, creativity and industry experience.  We help market leaders realize their full strategic value.  Having advised on over 100 industry transactions, KippsDeSanto is recognized for our analytical rigor, market insight and broad industry relationships.  There’s no substitute for experience.  For more information, visit www.kippsdesanto.com.