STG finds its white knight
SOS International makes $83M deal for STG to add national security, diplomatic agencies
- By Ross Wilkers
- Apr 11, 2018
(NOTE: This story has been updated to include the purchase price, which was disclosed in a regulatory filing Thursday morning after this story was first published)
SOS International said Wednesday it has acquired troubled STG Inc. for $83 million to expand technology and cyber services for agencies in the national security and diplomatic communities.
Terms of the transaction were undisclosed, while this is SOSi’s third acquisition in two years and its largest in that time frame after deals for Defense Group Inc. in September of last year and New World Solutions in January 2016.
Reston, Virginia-based SOSi also grows its information assurance, software development and data analytics footprints with the addition of STG. SOSi CEO Julian Setian said in a statement that it seeks to be “the leading middle-market company in the federal technology services sector.”
SOSi now has 1,300 employees worldwide with the addition of STG.
Also headquartered in Reston, STG found a buyer nearly five months after the defense IT contractor’s parent company STG Group was taken over by creditors after months of struggles to meet conditions of loans and an eventual default on debt. STG saw several quarters of revenue declines and a rise in net losses over that period also.
STG restructured itself and its board of directors examined alternatives for the company that included either a sale, an equity investment or a debt restructuring.
The company’s financial troubles became more public over the summer of last year when it did not secure the financing to close a previously-announced $119.8 million acquisition of Preferred Systems Solutions.
Cowen was SOSi’s financial adviser and Holland & Knight acted as legal counsel. Raymond James & Associates Inc. was STG’s financial adviser and Pillsbury Winthrop Shaw Pittman LLP acted as legal counsel.
Ross Wilkers is a senior staff writer for Washington Technology. He can be reached at firstname.lastname@example.org. Follow him on Twitter: @rosswilkers. Also connect with him on LinkedIn.