Deal Expands Serco's Business in DoD and U.S. Federal Sectors
RESTON, Va., Aug. 27 /PRNewswire-FirstCall/ -- Serco Inc., the
U.S.-based division of leading international service company Serco Group
plc, and SI International, Inc. (Nasdaq: SINT) today announced that they
have entered into a definitive merger agreement. Under the agreement, Serco
will acquire SI International for $32 per share in cash, or an aggregate
purchase price on a fully diluted share basis of approximately $423
million. Serco will also assume SI International's debt, which, at June 28,
2008, was $87.3 million, net of cash. The per share purchase price
represents a premium of 40 percent over SI International closing stock
price on August 26, 2008. SI International is one of the federal
contracting sector's most recognized companies, focused on mission critical
technology, information services, outsourcing, and network solutions for
U.S. federal defense and civilian government clients. The proposed
transaction has been unanimously approved by the board of directors of both
companies.
The proposed acquisition of SI International would be the second major
transaction in three years for the North American division of Serco and
would propel the combined company to the tier of $1 billion-plus federal
contractors in the U.S. Based upon 2007 reported financial results, the
combined companies would have total revenues of approximately $1.3 billion
and 11,500 employees serving government clients. The proposed transaction
will further strengthen Serco's growing portfolio of services to the
Department of Defense, U.S. intelligence and security agencies and federal
civilian agencies. The transaction, which is expected to close by the end
of 2008, is subject to an affirmative vote of SI International's
shareholders, regulatory approvals including Hart-Scott-Rodino and
Exon-Florio, and customary closing conditions. SI International's
shareholders will have an opportunity to vote on the proposed transaction
at a special shareholder meeting to be scheduled at a later date.
"Serco and SI International share the same commitment to excellent
service and complement each other exceptionally well in both capabilities
and markets," said Ed Casey, Chairman and CEO of Serco Inc. "SI
International strengthens our ability to bring business process
re-engineering (BPR) and technology solutions to the most demanding
government missions, while our increased combined scale positions our
businesses to deliver even larger and more complex integrated solutions for
our customers."
"We are pleased that we can join a company of Serco's stature and
success," said Brad Antle, President and CEO of SI International. "We have
had a tremendous track record during our ten-year history and are very
proud of the leading position we have achieved in the government services
sector. Now is the right time to go to the next level so the services we
provide to our customers are enhanced by the scale and global reach that
Serco can offer."
This proposed transaction would further evolve Serco's North American
organization into a management services business with a broad and balanced
portfolio of government clients, contracts and capabilities. In 2005 Serco
acquired defense contractor RCI and in 2007 won nearly $1 billion in major
contracts involving logistics, port security, transformation of critical
government services, aviation services and military personnel support for
clients that include the U.S. Army, Navy, Marine Corps, and the U.S. Postal
Service. Serco was named the Most Admired Support Services Company in the
UK and has approximately 40,000 employees in 30 countries, with 7,000
employees in North America.
SI International, which has made a number of acquisitions in its
ten-year history, is focused on federal IT modernization, defense
transformation, homeland defense and mission-critical outsourcing. The
company's clients include the U.S. Air Force, Army, Department of Defense,
intelligence community, and 15 major federal civilian agencies, including
the Department of Homeland Security, the Department of State, and Federal
Retirement Thrift Investment Board. SI International has 4,500 employees,
nearly 80 percent who hold security clearances. In 2007, SI International
received the coveted Greater Washington Area Contractor of the Year award.
UBS Securities LLC acted as exclusive financial advisor to Serco.
Skadden, Arps, Slate, Meagher & Flom LLP and Kaye Scholer LLP (for
regulatory matters) acted as legal advisors to Serco Inc. in connection
with the transaction. Wachovia Capital Markets, LLC acted as the financial
advisor and Morrison & Foerster LLP acted as legal advisor to SI
International in connection with the transaction.
This news release may contain forward-looking statements for purposes
of the safe harbor provisions under The Private Securities Litigation
Reform Act of 1995. Actual results may differ materially from those
indicated by these forward-looking statements as a result of various risks
and uncertainties. Such risks include, without limitation, the risk that
the transaction will not be consummated as a result of the failure of any
of the conditions precedent, such as the ability to obtain government
approvals required for closing the transaction. SI International undertakes
no duty to update any forward-looking statements to conform the statement
to actual results or changes in expectations that may arise after the date
of this release. We caution you not to place undue reliance upon any such
forward-looking statements.
About Serco
Serco is a $6 billion revenue international management services company
that enables government, military and commercial customers to improve
processes, achieve mission objectives and exceed ever-increasing public
service expectations. Its North American unit, Serco Inc., based in Reston,
VA, designs and delivers human capital management, engineering/logistics,
economic cost analysis, integrated lifecycle transportation management
solutions to military, federal civil agencies, state and local government
and commercial customers. Visit http://www.serco-na.com to learn more about
Serco's North America division and http://www.serco.com for information on Serco
Group plc.
About SI International
SI International, a member of the Russell 2000 and S&P SmallCap 600
indices, is a provider of information technology and network solutions (IT)
primarily to the federal government. SI International combines technology
and industry expertise to provide a full spectrum of state-of-the-practice
solutions and services, from design and development to documentation and
operations, to assist clients in achieving their missions. SI International
is ranked as the 42nd largest Federal Prime IT Contractor by Washington
Technology and has approximately 4,500 employees. More information about SI
International can be found at http://www.si-intl.com.
IMPORTANT INFORMATION
This news release is not a solicitation of a proxy, an offer to
purchase or a solicitation of an offer to sell shares of SI International,
and is not a substitute for any proxy statement, tender offer statement or
other filing that may be made with the Securities and Exchange Commission
("SEC") with respect to the proposed transaction. SI International intends
to file and deliver all forms, proxy statements, notices and other
documents required under state and federal law regarding the proposed
transaction. SI International will be filing preliminary proxy materials
with the SEC for the special meeting of stockholders to be held to vote on
the proposed merger. Upon completion of the SEC's review of the preliminary
proxy materials, SI International will call a special meeting of its
stockholders to vote on the merger and will file with the SEC and mail to
SI International stockholders definitive proxy materials. Before making any
voting or investment decisions, investors and stockholders of SI
International are urged to read the definitive proxy materials regarding
the merger transaction carefully in their entirety when they become
available, because they will contain important information about the
proposed transaction, including, among other things, the recommendation of
SI International board of directors in respect of the merger. Copies of the
definitive proxy materials and any amendments or supplements thereto may be
obtained without charge, as they become available, at the SEC's website at
http://www.sec.gov or at SI International website at
http://www.si-intl.com. Investors and stockholders also may obtain a free
copy of the definitive proxy statement, when it becomes available, and
other documents filed with, or furnished to, the SEC from SI International
by directing a written request to SI International, Inc., 12012 Sunset
Hills Road, Suite 800, Reston VA 20190 Attention: Company Secretary.
SI International and certain of its directors, executive officers and
management employees and other persons, may be deemed to be participants in
the solicitation of proxies from SI International's stockholders in favor
of the approval of the transaction. Information regarding SI
International's directors, executive officers and management employees and
their respective interests in SI International by security holdings or
otherwise is set forth in SI International's Proxy Statement on Schedule
14A for its 2008 Annual Meeting of Stockholders, filed with the SEC on
April 18, 2008.
Serco Contact
Laura Baldwin
Qorvis Communications
(202) 253 9882
lbaldwin@qorvis.com
SI International Contact
Alan Hill
Vice President, Corporate Communications & Investor Relations
SI International, Inc.
703-234-6854
Alan.Hill@si-intl.com
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SOURCE SI International
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Related links:
http://www.si-intl.com
http://www.serco-na.com http://www.serco.com
CONTACT:
Laura Baldwin, Qorvis Communications,
+1-202-253 9882, lbaldwin@qorvis.com, for Serco; Alan Hill, Vice
President, Corporate Communications & Investor Relations, SI
International, Inc., +1-703-234-6854, Alan.Hill@si-intl.com
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