KeyW Holding Corp. signed a merger agreement with Jacobs and Atom Acquisition Sub, Inc. following a transaction with an enterprise value of $815 million and unanimous approval by the voting members of each company’s board of directors.
The deal includes an estimated $272 million of KeyW net debt. Atom, the resulting merger sub, is a recent wholly owned indirect subsidiary of Jacobs that will be acquired by the company for $11.25 per share.
KeyW is an intelligence, cyber and mission IT and analytics solutions provider, and Jacobs delivers professional services focusing on global connectivity and sustainability spanning intelligence, water, infrastructure, renewal, mobility and more. The company brought in $15 billion in revenue in fiscal 2018.
“Exciting to see Jacobs (like some of its engineering peers and other ‘non-traditional buyers’) continue to make aggressive moves to increase its national security presence,” said Bob Kipps, managing director of investment bank KippsDeSanto & Co.
KeyW CEO and President Bill Weber said the transaction would enable the company to create new opportunities for research and development its customers need for national security and intelligence.
“With the currently strong federal funding scenario and KeyW’s solid reputation in ISR, Cyber and Analytics services technologies, I believe combining with Jacobs will provide our customers a wide array of capabilities and services via a broad range of contracting vehicles,” Weber said. He added that cultural fit and exceptional shareholder value were key in selecting KeyW’s partner.
According to Jacobs Chair and CEO Steve Demetriou, the feeling is mutual.
“We are positioned to further accelerate KeyW’s success in leveraging its unique technical solutions and drive value creation for shareholders and customers alike, including a multi-billion-dollar space opportunity delivering next generation intelligence and analytics solutions,” Demetriou said.
As part of the merger agreement, Atom will conduct an open public offer for all KeyW’s common stock. Once that offer is complete, Atom will merge with KeyW, and KeyW will be a wholly owned indirect subsidiary of Jacobs.
The closing transaction relies on KeyW shareholders offering more than 50 percent of KeyW’s outstanding common stock shares before the end of the open public offering. Any of KeyW’s common stock shares not tendered will be acquired by Jacobs, and the holders will be entitled to the per share merger consideration. But the KeyW Board will recommend shareholders tender their shares to Jacobs, according to the announcement.
The transaction — including all closing conditions and approvals — expects to be completed by Aug. 31.