(Bloomberg) -- Carlyle Group Inc. agreed to acquire ManTech International Corp. in a deal valuing the US government contractor at about $3.9 billion.
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The buyout firm will pay $96 per share in cash, according to a statement Monday, which confirmed an earlier Bloomberg News report. The offer represents a 32% premium to ManTech’s closing price on Feb. 2, the last trading day before reports on a potential sale of the company.
Shares of ManTech jumped as much as 16% in pre-market trading Monday, hitting as high as $94.90.
Carlyle and its peers have been sitting on mountains of dry powder, which they have been looking to deploy through mergers and acquisitions in a volatile stock market. Last year, Carlyle was part of a consortium buying medical supply company Medline Industries Inc. for more than $30 billion in one of 2021’s biggest M&A deals.
Private equity has recently gravitated toward US government contractors with an information technology bent, as they provide a steady stream of recurring revenue. One of Carlyle’s competitors, Veritas Capital, has consolidated several of these companies, including Perspecta Inc. which it acquired in a $7.1 billion deal to merge into its portfolio company Peraton.
ManTech, based in Virginia, provides IT services including analytics and cybersecurity, primarily to US defense and intelligence agencies. On May 4, it reported first-quarter net income of $31 million on revenue of almost $676 million. That compared with $32 million on $633 million in revenue the previous year.
The sale comes after the retirement of ManTech co-founder George Pedersen, whose family still owns a large stake in the company. Pedersen served as ManTech’s chief executive officer until 2018 and as chairman until 2020, before finally deciding to step down from the board completely in February. Reuters reported that month that Pedersen was exploring options for his stake as part of his estate planning.
“This announcement is an important milestone for ManTech and a testament to our growth and the leadership position we have built since our founding by George Pedersen more than 50 years ago,” ManTech Chairman Kevin Phillips said in the statement.
ManTech would be the latest listed company to leave public markets in what’s been a busy period for private equity takeovers. Dealmaking by buyout firms has been a bright spot this year, even as overall M&A slows compared to 2021’s record-breaking pace.
Carlyle’s purchase of ManTech values the company at about $4.2 billion including debt, according to Monday’s statement. It has been unanimously approved by ManTech’s board and is expected to close in the second half of 2022. The transaction will be subject to approval by ManTech shareholders as well as regulatory clearance, ManTech said.
Robert W. Baird & Co. advised Carlyle on the deal, while ManTech worked with Goldman Sachs Group Inc.
(Updates with pre-market trading in third paragraph)
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