News By Tag
* Venture Capital
* Mergers And Acquisition
* Funds News
* More Tags...
News By Location
JSM Financial: Cerberus Capital Management to buy defense contractor DynCorp International.
The $1 billion cash deal will be one of the biggest leveraged buyouts of a publicly trade U.S. firm since the onset of the global financial crisis.
By: JSM Financial
According to the terms of the agreement DynCorp’s shareholders will receive$17.55 in cash for each share of international common stock, a premium of almost 50% on the closing stock price on the day the deal was agreed. Also included is the assumption of debt, making the deal worth around $1.5 billion.
JSM Financial has however learned that a lawmaker who has been trying to phase out the use of private security contractors in conflict zones as well as a watchdog group have voiced concerns over the deal, saying that DynCorp going private could limit their ability to monitor a company which in the past has faced allegations of misconduct and which presently holds substantial contracts for the training of Iraqi police and U.S. support troops in Afghanistan.
The deal is believed to be the largest leveraged buyout since IMS Health Inc. agreed to be acquired by private equity firm TPG and the Canada Pension Plan for $4 billion, in February of this year.
JSM Financial believes the firms expect the transaction to close in the second half of this year, but it is believed that DynCorp could yet solicit alternative proposals for a 28 day period. There is a standing $30 million termination fee attached to the deal according to the U.S. Securities and Exchange commission.
# # #
JSM Financial is an independent broker focused on the realization of superior returns from seed stage and early-stage equity investment and active partnerships with exceptional entrepreneurs building market-leading technology companies.