Anatomy of SRA's $1.9B sale

Documents filed with the Securities and Exchange Commission last week provide a time line of SRA International’s sale to Providence Equity Partners for $1.9 billion.

According to a letter attachment to a Form 8-K filing on April 1, company founder and Chairman Ernst Volgenau told employees that in October 2010, the SRA board of directors formed a special committee composed of independent directors to “explore the possibility of a transaction such as the one we announced [April 1].”

Volgenau, who owns approximately 20 percent of the equity of SRA and controls 71 percent of the voting power, noted that the committee had its own financial adviser and legal team that were independent of him and SRA management “to ensure the neutrality of the [search] process.”

In January 2011, SRA employees were informed by letter that potential sale offers were being considered.

Sale of the company to Providence Equity Partners was announced April 1.

“Under terms of the merger agreement, SRA may solicit acquisition proposals from third parties for a 30-day ‘go-shop’ period from the date of the merger agreement,” a Providence Equity attachment explained.

Following SEC clearance, stockholders will receive a proxy statement in the company’s first quarter of fiscal 2012, which begins July 1, 2011. A shareholders’ meeting will follow to formally approve the acquisition.

Senior management and facilities will remain in place during the transition, which is expected to be completed during the company’s first quarter of Fiscal Year 2012.

At that time SRA International will become a private entity without the financial reporting requirements and quarterly focus associated with public companies. Its common stock will no longer be traded on the New York Stock Exchange.

Volgenau, who owns approximately 11.8 million shares of common stock, or 21 percent of the total shares outstanding, will “roll over a portion of his existing SRA equity interest and continue to be a significant shareholder in the privately held company,” the Providence Equity statement said.

He has agreed to vote his shares for approval of the merger. “However, in the event that the merger agreement is terminated, Dr. Volgenau will be released from this obligation,” the statement added.

SRA International, of Fairfax, Va., ranks No. 30 on Washington Technology’s 2010 Top 100 list of the largest federal government contractors.