SAIC To Buy Scitor For $790 Mln.

(RTTNews) - Science Applications International Corp (SAIC), a provider of technical, engineering and enterprise IT solutions, on Sunday said it agreed to buy smaller rival Scitor Corp from private equity firm Leonard Green & Partners for $790 million in cash.

SAIC expects the deal to be EPS accretive in the first year excluding amortization of intangibles and about $15 million of transaction costs. The deal is expected to be generally neutral to earnings on a GAAP EPS basis in the first year, excluding transaction costs.

The deal is expected to close in May 2015.

SAIC said the deal complementary and aligns with its strategy to expand into the intelligence community and Air Force markets.

The combined pro-forma annual revenue of the two companies is $4.5 billion on a historical basis with adjusted EBITDA of $321 million. SAIC has identified annual pre-tax cost synergies of at least $20 million. The combined companies will have a population of about 14,500 employees.

"The acquisition of Scitor unites two great companies with premier workforces making a profound difference for customers," said SAIC CEO Tony Moraco. "Scitor is a recognized market leader with long-standing customer and industry relationships within the intelligence community and is aligned with SAIC's market expansion strategy. Operating as one company represents an opportunity to create shareholder value by gaining access to new customers and leveraging capabilities from both companies to increase revenues and earnings."