FALLS CHURCH, Va., Nov. 16, 2020 (GLOBE NEWSWIRE) -- PAE (NASDAQ: PAE, PAEWW), a global leader in delivering smart solutions to the U.S. government and its allies, today announced that its subsidiary has entered into a definitive agreement to acquire Metis Solutions Corporation, a leading provider of intelligence analysis, operational and tactical training and program management, for approximately $92 million in cash. This represents a transaction multiple of approximately 9.7x CY2020 adjusted EBITDA, adjusted for estimated annual cost synergies.
PAE President and CEO John Heller commented:
“This acquisition expands and builds scale in intelligence analysis, training and program support, all of which are well-funded market areas of the U.S. government and our allied nations. Moreover, the acquisition of Metis is expected to be accretive to adjusted EBITDA margins and free cash flow. Additionally, in combination with CENTRA Technology, PAE will have significant breadth and depth across the Intelligence and National Security communities in capability and customer access.”
Metis is a leading provider of intelligence analysis, operational and tactical training and program management focused on supporting intelligence community, national security and defense customers. Headquartered in Arlington, Virginia, Metis has more than 450 employees, a majority of whom have top secret clearances with subject matter expertise across a broad range of critical national security issues.
“We are excited to join PAE and its heritage of service. Our shared cultures of service excellence and innovation make this a compelling combination. Together, we will pursue exciting new revenue opportunities,” said Christopher Wynes, Metis president and CEO. “Joining together with PAE will help accelerate growth in our intelligence and national security business and enable us to pursue a broader customer base across more markets.”
Strategic and Financial Benefits of the Acquisition
- Breadth of Contract Vehicles: The transaction brings more than eight strategic indefinite delivery, indefinite quantity contract vehicles, representing more than $60 billion of ceiling value that is expected to improve PAE’s business development pipeline in terms of number, size and win-rate percentage of opportunities.
- Broadens Offerings and Capabilities: Expands and builds scale in PAE’s intelligence analysis, training and program support business areas. These market areas are all well-funded by the U.S. government and our allied nations.
- Expands Whitespace Opportunity: Strategically positions PAE with new customers across the intelligence and defense communities.
- Attractive Financial Profile:Metis’ current financial profile, coupled with expected cost synergies, is expected to be accretive to organic revenue growth, adjusted EBITDA margins and free cash flow per share.
Financing and Approvals
The transaction has been unanimously approved by the boards of directors of both PAE and Metis. It is expected to close this quarter. PAE expects to fund the purchase price of approximately $92 million with cash on hand and utilization of its delayed draw term loan.
PAE is reiterating its fiscal year 2020 financial outlook provided on November 5th, 2020. The 2020 financial outlook does not incorporate anticipated financial results of CENTRA or Metis.
Advisors
Crowell & Moring LLP acted as legal advisor to PAE in connection with the transaction. Miles & Stockbridge P.C. acted as legal advisor and Raymond James & Associates, Inc. acted as financial advisor to Metis in connection with the transaction.
About PAE
For 65 years, PAE has tackled the world’s toughest challenges to deliver agile and steadfast solutions to the U.S. government and its allies. With a global workforce of approximately 20,000 on all seven continents and in approximately 60 countries, PAE delivers a broad range of operational support services to meet the critical needs of our clients. Our headquarters is in Falls Church, Virginia. Find us online at pae.com, on Facebook, Twitter and LinkedIn.
