KippsDeSanto & Co. advises Solers, Inc. on its sale to Peraton, a portfolio company of Veritas Capital

KippsDeSanto & Co. is pleased to announce the sale of its client, Solers, Inc. (“Solers” or the “Company”), to Peraton, Inc. (“Peraton”).

Based in Arlington, VA, Solers is a leading provider of software development and systems integration for space situational awareness, satellite ground systems and operations, cybersecurity engineering, and enterprise cloud-based solutions.

Through a targeted, customer-centric growth strategy, Solers has developed meaningful relationships with various agencies spanning the Department of Defense (“DoD”) and Intelligence Community (“IC”).  Strong performance for these clients has led to both expanded work under existing contracts and referrals, allowing Solers to broaden its reach as a leader in software engineering and system integration.  Since its founding in 1998, one of Solers’ strongest assets has been its team of highly skilled employees. These employees’ domain knowledge and extensive certifications (over 75% cleared) afford Solers both subject matter expertise and make it an attractive place for others to work on challenging and mission-critical projects.

As Peraton’s second acquisition, Solers’ reputation and abilities will strengthen Peraton’s already robust space portfolio.

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

• Space and National Intelligence continue to be highly coveted growth and M&A areas given budget and geopolitical security trends
• Buyers are focusing on targets with entrenched customer positioning, including sole source contracts, longstanding incumbency, and customer intimacy, as well as well-funded customers and highly cleared mission-critical programs
• Deep domain and subject matter expertise, particularly when coupled with long-term relationships, are critical differentiators for sellers in a crowded M&A market
• With today’s robust capital markets, private equity – via new platforms and add-ons to existing portfolio companies – are successfully competing against larger public strategics for even the most attractive assets

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

PERATON TO ACQUIRE SOLERS, INC.

Acquisition establishes Peraton as the premier solutions provider across the growing space protection and resiliency market

Herndon, VA, June 17, 2019 – Peraton, a portfolio company of Veritas Capital, has entered into a definitive agreement to acquire Solers, Inc., a leading provider of software development and systems integration for space situational awareness, satellite ground systems and operations, cybersecurity engineering, and enterprise cloud-based solutions.

“The acquisition of Solers represents an important step in the execution of our growth strategy and serves as a true force multiplier for Peraton and our customers. By bringing together some of the most proven and innovative space protection and ground operations technologies in the industry, we will be able to significantly enhance our ability to execute on our customers’ critical missions,” said Stu Shea, Chairman, President and CEO of Peraton. “I’m excited to welcome the talented Solers team to Peraton, strengthening our already robust space portfolio, technical excellence and rapid innovation capabilities.”

The Solers acquisition will accelerate both near- and long-range growth opportunities and enhance Peraton’s ability to deliver highly differentiated space protection and resiliency solutions that directly support mission objectives and critical national security initiatives. The combined capabilities will enable Peraton to expand its offerings of innovative and agile end-to-end solutions that address the growing complexity of customer mission needs across both national security and civilian agency space & ground programs.

“The Solers/Peraton alignment is truly a strategic fit and I have full confidence that the combined companies will continue Solers trademark high quality support to our government clients,” said David Kellogg, President and CEO of Solers. “Through our combination with Peraton – a company with whom we have many shared values – our customers will have access to some of the best people and technologies available to address their critical missions and our employees will benefit from greatly expanded growth opportunities as part of this new company.”

“Peraton’s transformational acquisition of Solers will accelerate the company’s presence in the high-priority, emerging space and communications markets,” said Ramzi Musallam, CEO and Managing Partner of Veritas Capital. “This combination will create a differentiated platform, strengthening Peraton’s ability to provide mission-critical services and solutions to its dynamic customer base.”

Investment bank KippsDeSanto acted as the financial advisor to Solers for this acquisition. Macquarie Capital acted as financial advisor to Peraton.

About Peraton

Peraton provides innovative, reliable solutions to the nation’s most sensitive and mission-critical programs and systems. As a trusted provider of highly differentiated space, intelligence, cyber, defense, homeland security, and communications capabilities, Peraton is a critical partner to the Intelligence Community, Department of Defense, and select federal agencies and commercial entities. Headquartered in Herndon, Virginia, the company employs more than 3,000 people across the U.S. and Canada. For more information on Peraton, visit www.peraton.com.

About Veritas Capital

Veritas Capital is a leading private equity firm that invests in companies that provide critical products and services, primarily technology and technology-enabled solutions, to government and commercial customers worldwide, including those operating in the aerospace & defense, healthcare, software, national security, communications, energy, government services and education industries. Veritas seeks to create value by strategically transforming the companies in which it invests through organic and inorganic means. For more information on Veritas Capital and its current and past investments, visit www.veritascapital.com.

 About Solers, Inc.

Founded in 1998, Solers is an innovative information technology solutions provider to the Department of Defense, Intelligence Community, other federal agencies, and commercial customers. With core capabilities in systems engineering, systems integration, space protection and resiliency, satellite ground systems, cloud computing, cyber engineering, and data engineering, Solers directly supports customer mission objectives and critical national security imperatives. For more information on Solers, visit www.solers.com.

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 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.”