Defense contractor DynCorp International (DCP) said Monday it agreed to be acquired by private equity firm Cerberus Capital Management for $1 billion.
Under the deal approved by DynCorp’s board, the New York-based Cerberus — one of the world’s leading private investment firms with approximately $23 billion under management in funds — said it will pay DynCorp’s stockholders $17.55 in cash for each share of DynCorp Int’l common stock they own, representing a premium of 49% from Friday’s closing price of $11.75. The transaction also includes the assumption of debt that pushes the total value of the deal to $1.5 billion.
As part of the agreement, DynCorp’s biggest shareholder, Veritas Capital Fund Management, agreed to vote its 34.9% ownership in favor of the sale.
“I believe that under this partnership with Cerberus, DynCorp International will be able to build on our extensive heritage and successful performance to continue to achieve our growth objectives,” William L. Ballhaus, DynCorp’s chief executive, said in a statement. “Importantly, this transaction is a major milestone for DynCorp International’s continued leadership in serving our customers and supporting U.S. national security and foreign policy objectives.”
Cerberus said it would fund the deal with equity financing, as well as debt financing from Bank of America (BAC), Citigroup (C), Barclays Bank plc and Deutsche Bank Securities (DB).
DynCorp was advised by Goldman Sachs (GS) and the law firm Schulte Roth & Zabel, which acted as outside legal counsel to DynCorp and its Board of Directors.
Shares of DynCorp International Inc. soared $5.73, or 48.77%, to $17.48 in NYSE trading.