Engility Holdings To Buy Privately-held TASC For About $1.1 Bln

(RTTNews) - Engility Holdings, Inc. (EGL) said Tuesday that it has agreed to buy privately-held TASC, Inc. a professional services provider to the national security and public safety markets, in an all-stock deal valued at about $1.1 billion, including the assumption of net debt.

The transaction was approved by the Boards of Directors of both companies and is expected to close in the first quarter of 2015.

On a pro-forma basis, following the close of the deal, the combined company is expected to generate about $2.5 billion in revenue and about $210 million in combined adjusted EBITDA in 2014, excluding cost savings.

Engility stockholders of record as of the date prior to the closing of the deal will receive a special cash dividend of about $11.40 per share for each Engility share they own, subject to final adjustments depending on Engility's diluted share count at time of closing. TASC stockholders will receive about 18.9 million shares of Engility Holdings, representing an about 51% ownership stake in the combined company on a pro-forma, fully-diluted basis. The deal is valued at about $1.1 billion, including the assumption of about $613 million in net debt and the net present value of TASC's tax assets.

Tony Smeraglinolo, Engility's current CEO, will be the combined company's President and Chief Executive Officer, and John Hynes, current President and Chief Executive Officer of TASC, will become Chief Operating Officer of the combined entity. Edward Boykin, chairman of Engility, and Peter Marino, currently chairman of TASC, will become non-executive co-chairs of the combined company.

Effective as of the closing, Engility will enter into a stockholders agreement with the TASC investors. As part of the agreement, the board will expand from seven to 11 members, with the TASC investors entitled to nominate, and holding sufficient votes to elect, the additional four members.