Metalmark buys into government market

Metalmark Capital Holdings LLC, a private equity firm in New York, acquired Schafer Corp., an engineering and professional services company.

The firm did not disclose terms of the deal.

Schafer provides scientific, engineering, systems integration, programmatic support and technical solutions to agencies such as the Army, Air Force, Navy, the Defense Advanced Research Projects Agency, the Missile Defense Agency, NASA and the Homeland Security Department.

John Garcia will remain chief executive officer, a post he has held since 2000. Lawrence Delaney, former chief operating officer of Titan Corp. and former chief information officer of the Air Force and acting Air Force secretary, is the company’s new chairman.

John Gilligan, former senior vice president and director of the defense sector at SRA International and CIO of the Air Force and Energy Department, will join the company’s board as vice chairman.

“We anticipate that Metalmark’s access to capital and industry expertise will enable Schafer to accelerate its growth plan and enhance service offerings,” Garcia said.

Houlihan Lokey and Posternak Blankstein and Lund LLP served as financial and legal advisor to Schafer. Kirkland and Ellis LLP was legal adviser to Metalmark Capital.

“This transaction reflects the active private equity interest that we are seeing in well-performing companies in the government services space,” said Jean Stack, senior vice president at Houlihan Lokey. “This remains an active [mergers and acquisition] market for companies with strong growth, solid margins and defensible market positions.”