Fairfax-based contracting giant SRA International is moving forward with its plan to go private and be acquired by Providence Equity Partners after receiving no alternative proposals during a “go-shop” period.
The company said last week that its financial adviser contacted 50 potential buyers — 29 strategic and 21 financial — about suggesting an alternative transaction but failed to receive any offers.
So the company plans to finalize the acquisition agreement, under which Providence is to pay $31.25 per share, totaling about $1.88 billion. The deal is expected to close between July and September.
In its original announcement, SRA pointed out that despite speculation it never received or rejected a higher, $2 billion offer.
Analysts said the lack of alternative proposals does not mean the acquisition market for government contracting firms is weakening. Indeed, Hanover-based Keyw, which has been one of the most active acquirers in recent months, announced last week it has bought Leesburg-based cybersecurity company Forbes Analytic Software.
The 47-employee company — Keyw’s 11th purchase — is projected to produce $14 million to $15 million in revenue for 2011. Keyw bought the company for a total price of about $16.7 million, $14.7 million in cash plus 171,970 shares of Keyw stock.
Bob Kipps, managing director of the McLean-based investment firm KippsDeSanto, said it was unsurprising that SRA received no alternative offers. Before announcing the deal with Providence, the firm had publicly acknowledged that it was working with a financial adviser.
“Buyers had already had their chance prior to signing the deal with Providence,” Kipps said.
McLean-based contractor Global Defense Technology & Systems, which announced earlier this year its acquisition by an affiliate of private-equity firm Ares Management, also did not receive alternative proposals.
But the company’s deal relied on a share price of $24.25, a nearly 51 percent boost over the company’s $16.08 close the day before the agreement was announced.
Mitchell Martin, a senior managing director with the investment firm McLean Group, said the environment remains competitive, particularly for firms in attractive areas such as data analytics or cybersecurity.
“Frankly, we’re seeing a lot of money chasing some of the deals,” he said.
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