DRC announces purchase of Andrulis

Dynamics Research Corp. is acquiring Andrulis Corp., an Arlington, Va., provider of information technology and engineering services to government customers in a $26 million deal.

The purchase is expected to close before the end of December, said officials with DRC of Andover, Mass.

About half of the deal is for cash, and rest is to be paid by a promissory note due in January. DRC will fund the purchase from cash on hand and its $50 million revolving credit facility.

The acquisition is expected to add between $1 million and $1.5 million to DRC's 2002 revenue, but will have little effect on profits because of one-time expenses related to the purchase, the company said.

Founded in 1971, Andrulis' customers include the Office of Naval Research, the Naval Ammunitions Logistics Center, the Naval Sea Logistics Center, the Naval Surface Warfare Center, the Military Sealift Command and the Missile Defense Agency. The company's civilian agency customers include the Immigration and Naturalization Service, the departments of Housing and Urban Development, Justice and Commerce, and the National Science Foundation.

"This acquisition is in many ways a transforming event for DRC [and will] greatly strengthen DRC's business operations across all of the major markets that we serve," said James Regan, chairman and chief executive officer of DRC. The company is picking up new defense and civilian customers and is adding to its homeland security capabilities.

"It's a pretty good transaction for them, in the price range we usually see," said Tom Meagher, vice president of equity research, BB&T Capital Markets, Richmond, Va. "The most positive thing is that it really does give them exposure in agencies where they've never worked before, such as INS and Missile Defense."

DRC's fiscal 2001 revenue was just over $201 million, with more than 1,500 employees. Andrulis recorded fiscal 2002 revenue of $36.6 million, and employs approximately 300 people.

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