Technology solutions group SAIC (Science Applications International Corp) has completed its US$790m all-cash acquisition of US defence contractor Scitor.
SAIC said the deal will accelerate plans to grow its presence in the US intelligence sector,…
Technology solutions group SAIC (Science Applications International Corp) has completed its US$790m all-cash acquisition of US defence contractor Scitor.
SAIC said the deal will accelerate plans to grow its presence in the US intelligence sector, with Scitor giving the group access to classified contracts, cleared personnel, and an established security infrastructure.
Scitor will become part of SAIC’s newly created Intelligence Community Customer Group, which will be led by former Scitor president Timothy Dills. The unit is expected to generate around 11% of the company’s revenues over the next year.
The seller was private equity firm Leonard Green & Partners, which purchased Scitor back in September 2007. The price paid was undisclosed but was thought to be just over US$500m.
To fund the acquisition, SAIC raised US$570m via a new term loan and increased an existing facility by US$100m. The new term loan B facility matures in May 2022, is covenant-lite and pays 330 basis points over Libor. The upsized term loan A is now worth US$581.25m, and will be secured against the assets of both SAIC and Scitor. It still matures in September 2018, alongside SAIC’s unadjusted undrawn US$200m revolving credit facility.
Citigroup was lead arranger on the financing as well as SAIC’s M&A adviser for the merger.
According to ratings agency Standard & Poor’s, the US$670m of additional debt increases SAIC’s leverage from 1x to 3.5x debt-to-EBITDA. This is within the Senior Secured Leverage Ratio of 4x agreed in SAIC’s adjusted credit agreement.
