AMS to acquire Vredenburg

American Management Systems Inc. is acquiring R.M. Vredenburg & Co., a privately owned provider of professional and technical services to the Defense Department and intelligence communities.

AMS has agreed to pay about $42 million in cash and assume existing debt, plus up to $4 million in performance-based payments ? payments based on meeting certain goals over the next 12 months ? and management retention agreements of up to $4.3 million.

The final purchase price will be settled at the date of closing, which is expected to be within the next 30 days.

Once completed, the acquisition will add approximately $60 million in annual revenue to AMS, provide access to additional government contract vehicles, and expand the company's presence and capabilities in the defense and intelligence markets, AMS officials said.

Vredenburg Chairman H.K. "Duke" Baboyian has been considering a sale for a few years, said Bob Kipps, director of the aerospace-defense-government group at Houlihan Lokey Howard & Zukin in McLean, Va., the investment banking firm that represented Vredenburg.

It also was a good time for Vredenburg to sell because it has been doing very well in the government market, Kipps aid. And it is "really an above-average time in the market to sell," he added. "There's more activity, more interest [and] higher prices."

Kipps said AMS decision to purchase Vredenburg is a recognition that the government space is currently a better investment opportunity than the commercial space. Computer Science Corp., with its purchase of DynCorp last year, and Perot Systems Corp., with several acquisitions, have made similar moves, Kipps said.

All of Vredenburg's management team, with the exception of its chairman, will remain with AMS, Kipps said.

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