Monday, February 13, 2006
Last year's big deals were ranked by a panel of merger and acquisition experts from a list of 100 deals compiled for Washington Technology by Houlihan Lokey Howard & Zukin.*
No 1.
Buyer: L-3 Communications Inc., New York
Seller: Titan Corp., San Diego
Purchase price: $2.6 billion
Closing date: July 29
Investment bank: Lehman Brothers Inc. for L-3 and Relational Advisors LLC for Titan
Why it's a big deal: This was the biggest deal of the year by size, but more importantly it gave L-3 a large presence as an information technology and systems engineering provider to defense and intelligence customers. The acquisition also brought the exit of Gene W. Ray, Titan's founder. Titan, like L-3, was always an aggressive acquirer. Now one consolidator in the federal market has been swallowed by another.
No. 2.Buyer: Nortel Networks Corp., Brampton, Ontario
Seller: PEC Solutions Inc., Fairfax
Purchase price: $425 million
Closing date: June 7
Investment bank: BB&T Capital Markets/Windsor Group for Nortel; J.P. Morgan for PEC
Why it's a big deal: It's another sign of the U.S. market's attractiveness to foreign buyers. As a non-U.S. company, Nortel was limited in how it could compete for federal work. With the PEC purchase, Nortel has set up a wholly owned subsidiary with an independent board of directors and now can compete unfettered. The PEC acquisition also marks the departure of a strong, mid-tier company that itself was making acquisitions.
No. 3.Buyer: Qinetiq Ltd., Farnborough, England
Seller: Apogen Technologies Inc., McLean
Purchase price: $288 million
Closing date: Sept. 12
Investment bank: UBS Investment Bank for Apogen
Why it's a big deal: Another foreign buyer is just part of the story. Apogen is Qinetiq's platform for growth in the IT space in the United States. With its British parent's backing, more deals are expected from Apogen.
No. 4.Buyer: Veritas Capital Fund LP, New York
Seller: Most of DynCorp's technical services business from Computer Sciences Corp., El Segundo, Calif.
Purchase price: $850 million
Closing date: Feb. 14
Investment bank: Goldman Sachs & Co. and UBS Securities LLC for CSC
Why it's a big deal: Veritas continues to show it has an appetite for government-related acquisitions. In 2004, the company acquired McNeil Technologies Inc. of Springfield, Va., as an IT platform. When Veritas acquired parts of DynCorp, it created a second platform for government services business. The plan is for DynCorp to go public, returning a familiar name to the market as an independent entity. DynCorp had a 50-plus year history as a government contractor.
No. 5.Buyer: Serco Group PLC, Hampshire, England
Seller: RCI Holding Corp., Vienna
Purchase price: $215 million
Closing date: March 21
Investment bank: Legg Mason Wood Walker Inc. for RCI
Why it's a big deal: This was a successful exit for RCI's owner, private equity group CM Equity Partners of New York. The deal also was Serco's entry into the U.S. federal market -- Serco North American Inc. was already working with state and local governments. With RCI, Serco picks up a strong defense business; 75 percent of RCI's $289 million in annual revenue comes from military customers.
For the full list of the top 10 mergers and acquisitions and more detail on the deals, go tohttp://www.washingtontechnology.com.
*The panel of experts: John C. Allen and J. Richard Knop, BB&T Capital Markets/Windsor Group; Donald Blair, Raymond James & Associates Inc.; Charles H. Chappell, Minuteman Ventures LLC; William Farmer, Jefferies Quarterdeck LLC; Jerry Grossman and Paul Serotkin and Robert Kipps, Houlihan Lokey Howard & Zukin LLC; Kerry Hall, Grant Thornton LLP; Mark Moore, Longstreet Partners LLC; Thomas Peltier, Stifel Nicolaus & Co.; and Robert Rubin, National Capital Cos.
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