ERC International of Vienna has reached an agreement to acquire Appalachian Computer Services Inc. in a stock swap worth about $22.6 million, officials of the companies said Friday.
Under the proposal, ERC would issue two shares of its common stock to ACS in exchange for each of its approximately 942,000 outstanding shares.
The final agreement still is under negotiation and subject to approval of both companies' boards of directors and shareholders. The deal is expected to be completed before Oct. 15.
The agreement in principle, signed by Jack Aalseth, chairman of ERC, and Kenneth James, president of ACS, outlines the major points of the transaction and prevents another company from buying ACS.
ACS, a $22 million computer-services company, is privately held by about 300 shareholders.
ERC is a $65 million public company involved in software, engineering, technical and consulting services for the Defense Department and commercial clients. It is organized into four marketing groups: defense, computer systems, energy and the environment, and logistics and facilities management.
Joseph G. Procopio, vice president of ERC, said ACS, which is based in London, Ky., probably would absorb some of ERC's information services operations and operate as a division under James, who will join the board of directors of ERC.
ERC said the combined revenue of the companies in 1985 was $88 million, with combined earnings of $4.2 million. For the first quarter of 1986, the combined company would have earned $1.2 million on revenue of $29 million, ERC said.