SRA sold to private equity group for $1.9B

SRA International Inc. is being sold to an affiliate of Providence Equity Partners in an all-cash deal.

SRA International Inc. has been sold to an affiliate of Providence Equity Partners in an all-cash transaction valued at $1.88 billion.

SRA announced the all-cash definitive merger agreement today, following unanimous approval by the company’s board of directors. SRA Founder and Chairman Ernst Volgenau abstained.


Anatomy of SRA's $1.9B sale

"We believe in the merits of this transaction, which serves the best interests of our shareholders, as well as those of our 7,300 employees and more than 1,400 contracts with customers," Volgenau said in the announcement.

"We also look forward to partnering with Providence, whose values and culture are consistent with SRA's long-standing ethic of honesty and service," he said. "We believe these characteristics are critical as we continue to build SRA and sustain its competitive positioning for the future."

Under the terms of the agreement, SRA shareholders will receive $31.25 in cash for each share of common stock, including a 10.2 percent premium based on the closing price of $28.36 on March 31 and a premium of 52.8 percent above the closing price of $20.45 on Dec. 31, 2010, the company's unaffected share price.

After completion of the transaction, SRA headquarters will remain in Fairfax, Va., and the company will continue to be led by its existing senior management team with Volgenau serving as chairman of the board.

According to the announcement, SRA and Providence began exploring the possibility of an acquisition in October 2010, when SRA's board of directors formed a special committee of independent directors to look into a sale.

Houlihan Lokey acted as financial adviser and Kirkland and Ellis acted as legal adviser to the SRA board of directors’ special committee. Citigroup Global Markets Inc. and BofA Merrill Lynch acted as financial advisers and Debevoise and Plimpton served as legal counsel to Providence for the transaction.

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