M&A

Veritas Capital to acquire Alion Science and Technology Corp.

Veritas Capital has acquired Alion Science and Technology Corp. just a few months after the company announced it was planning a public offering to pay down debt.

Financial terms of the transaction were not disclosed.

Alion in April said that it planned to use net proceeds from its initial public offering to pay off around $561 million in debt, a number which their SEC filings state they had as of Mar. 31, 2015.

The company was attractive to Veritas because of its capabilities in system analysis, agile engineering, modeling and simulation and naval architecture, said Ramzi Musallam, managing partner for Veritas, in a release.

The transaction will allow Alion to reshape its capital structure and strength its financial position, said Bahman Atefi, Alion chairman and CEO.

Credit Suisse and Wells Fargo served as financial advisor to Alion on the transaction.

About the Author

Mark Hoover is a senior staff writer with Washington Technology. You can contact him at mhoover@washingtontechnology.com, or connect with him on Twitter at @mhooverWT.

Reader Comments

Mon, Nov 2, 2015

Why hasn't anyone considered a suit against Alion's top management? This isn't an Enron, but a lot of folks got hurt very badly by this

Fri, Sep 18, 2015 mr

One week, Alion is sending out documents (via fedex priority overnight) to shareholders asking them to approve a reverse stock split in preparation for an IPO. Not 10 days later, we received notice that Alion has been sold - not that Alion is in negotiations, but that the deal has been sealed. Can someone explain how that can legally happen with absolutely no notice to shareholders?

Thu, Sep 3, 2015

Alion debt was $561 million. The buyout was $715 million. The purchase price paid by Veritas for Alion was approximately $715 million. After repayment of outstanding debt (including redemption premiums) and transaction expenses, the value to the equity holders was approximately $28.1 million, of which approximately $15.2 million will be distributed to the ESOP trust. Where did $12.9 million go?! from the $28.1 million. In fact $715 minus $561 = $154 million. How was that remainder handled?!!

Thu, Aug 27, 2015 Ryan Norfolk

Well, the share price is ~1.20/share... and the last evaluation was 2.45/share... so....

Thu, Aug 27, 2015

J. Hughes - not sure what your source was, but the ESOP cashed out at $1.18 (~50% drop). Stock was at a high of $43.37 in March 2007 and plummeted since then. But guess who all got exorbitant bonuses the entire time? No incentive to keep the stock price up when you get cash bonuses that aren't based on performance.

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