PAE will get CENTRA Technology, Inc. in a $208 million trade, net of tax advantages.
The company mix expands and differentiates PAE’s abilities in intelligence investigation, communicating systems integration and development and research solutions for intelligence and defense clients.
The purchase is anticipated to be accretive to key financial metrics including natural revenue growth, adjusted EBITDA margins and free cash flow.
CENTRA’s company will expand PAE’s consumer reach and provides appealing contract vehicles into the firm’s portfolio.
FALLS CHURCH, Va., Oct. 26, 2020 (GLOBE NEWSWIRE) — PAE (NASDAQ: PAE, PAEWW), a worldwide leader in providing smart answers into the U.S. government and its allies, today announced that its subsidiary has entered into a definitive agreement to acquire CENTRA Technology, Inc., a leading independent supplier of high-end intelligence assistance, data analytics, engineering solutions and other innovative technology solutions, including approximately $208 million (net of tax advantages ) in money.
This represents a trade multiple of roughly 8.8x CY2020 adjusted EBITDA, adjusted to the net present value of tax assets and projected cost synergies.
“The purchase firmly contrasts with PAE’s approach of expanding the company to higher-margin market locations. By obtaining CENTRA, PAE comprehends an important landmark in the implementation of our strategic expansion strategy to be a supplier of advanced, higher gross profit, knowledge-based offerings in appealing, resilient end niches.
This exciting opportunity builds on our intelligence analysis abilities while raising customer accessibility, accelerating expansion and improving shareholder value. Also, the purchase of CENTRA is anticipated to be accretive to adjusted EBITDA margins and free cash flow”
CENTRA is an intelligence investigation service provider dedicated to providing mission critical services to the intelligence community along with other U.S. national and homeland security clients. Headquartered in Burlington, Massachusetts, CENTRA has over 760 workers, the vast majority of whom have top secret clearances with subject matter expertise across a wide variety of crucial national security problems.
“This transaction will enhance CENTRA’s capacities and create new opportunities for our clients and employees,” stated Jack Barry, Chief Operating Officer of CENTRA Technology. “The clients, offerings and contracts of every company complement each other nicely and will be appealing for all stakeholders”
Significantly Increases Addressable Market: Transaction increases PAE’s overall addressable market by roughly $36 billion in annual economy; supplies PAE the capacity to actionably pursue a number of substantial contracts in new market segments.
Broadens Service and Technology Offerings: Brings fresh, value-add support and technology offerings into the portfolio; such as intelligence analysis, communicating systems integration and development and research services.
Expands Customer Footprint and Contract Vehicles
Add new clients within the Intelligence Community and Departments of Defense and Homeland Security, along with providing access to several big contract vehicles.
Offers Added Exposure to Financial Profile: CENTRA’s contract portfolio has been emphasized by reduced levels of recomplete hazard coupled with various recent substantial new business wins which provide roughly $1 billion of backlog, roughly 4x CY2020 revenue quotes.
Adds Uniquely Qualified Workers to Workforce: Provides highly proficient and cleared specialists, such as about 700 workers with Leading Secret/Sensitive Compartmented Information clearances with subject matter expertise across a selection of critical national security problems.
Funding and Approvals PAE hopes to finance the cost of about $208 million with money available and use of its own delayed draw term loan.
Advisors of Centra Technology
Greenberg Traurig, LLP acted as legal adviser and Citizens Capital Markets, Inc. acted as financial adviser to CENTRA in connection with the trade. And will place a investor presentation to your own site. Listeners and other interested parties will have the ability to get a presentation summarizing the trade on the PAE Investor Relations site.
Interested parties are encouraged to join the webcast in the PAE Investor Relations site. On account of this COVID-19 pandemic, teleconference suppliers internationally are experiencing substantial gains in conference call quantity. Therefore, PAE urges that parties take part in linking the webcast. Alternately, in the event the webcast isn’t practical, attendees can hear this conference call by dialing -LRB-855-RRB- 982-6676 and entering conference ID 1796253. The global dial-in accessibility amount is -LRB-614-RRB- 999-9188.
The business will post a record of the webcast after the telephone on the PAE Investor Relations site.
For 65 decades, PAE has handled the planet’s toughest challenges to provide agile and loyal answers to the U.S. government and its allies. With a worldwide workforce of roughly 20,000 on all seven continents and in around 60 countries, PAE provides a wide selection of operational support services to satisfy the essential requirements of our clientele.
Our headquarters is located in Falls Church, Virginia. These forward-looking statements include, but aren’t limited to, statements regarding our expectations and projections concerning the purchase of CENTRA Technology, Inc., PAE’s possible or assumed future results of operations, financial outcomes, backlog, estimation of assets for contracts, plan for and direction of expansion, demands for additional capital, risks associated with government contracting normally, such as failures to correctly handle projects and subcontractors, susceptibility to claims, litigation and other disputes, and dangers associated with public health disasters.
These forward-looking statements derive from PAE’s management’s current expectations, estimates, projections and beliefs, in addition to a range of assumptions regarding future events.
These forward-looking statements aren’t guarantees of future performance, results or conditions, and involve several known and unknown risks, uncertainties, assumptions and other important factors, many of which are out PAE’s administration’s control, which could cause actual results to differ materially from the results mentioned at the forward-looking statements.
Forward-looking statements contained in this release speak only as of the date of the release. PAE doesn’t undertake any obligation to update its own forward-looking statements to reflect events or circumstances after the date of this release except as might be required from the federal securities laws.
Non-GAAP Financial Steps
The organization uses adjusted EBITDA, adjusted EBITDA margin and free cash flow as supplementary non-GAAP steps of performance. Adjusted EBITDA excludes certain levels included in EBITDA. Adjusted EBITDA margin is calculated as adjusted EBITDA divided by earnings expressed as a proportion.
PAE thinks that the utilization of those non-GAAP financial measures offers an additional tool for investors to use in assessing the acquisition by PAE of CENTRA Technology Inc. along with the projected future operating and financial consequences of PAE. The non-GAAP financial measures offered in this press release are forward-looking.
PAE isn’t supplying a quantitative understanding of adjusted EBITDA or adjusted EBITDA margin in dependence on the “irrational attempts” exclusion for forward-looking non-GAAP steps put forth in SEC rules because certain financial advice, the likely importance of that cannot be ascertained, isn’t accessible and cannot be reasonably estimated without excessive effort and expenditure.
In this aspect, the Company doesn’t offer a reconciliation of forward-looking adjusted EBITDA (non-GAAP) to GAAP net earnings, because of the inherent difficulty in predicting and quantifying certain quantities that are essential for such reconciliation.
Because particular deductions such as non-GAAP exclusions utilized to compute projected net income might vary considerably based on real events, the business is unable to predict on a GAAP basis with reasonable certainty all of deductions required so as to supply a GAAP calculation of projected net income in this moment.
The amounts of those deductions could be substance and, thus, could lead to projected GAAP net income being materially less than is indicated by projected adjusted EBITDA (non-GAAP). Additionally, the Company doesn’t offer a reconciliation of forward-looking free cash flow (non-GAAP) to GAAP cash flows provided by operating activities and GAAP cash used in investing activities, because of the inherent difficulty in predicting and quantifying certain quantities that are essential for this reconciliation.
Because particular line items used to compute projected cash flows provided by operating activities and cash used in investing activities might vary considerably based on real events, the business is unable to predict on a GAAP basis with reasonable certainty all line objects required so as to extend a GAAP calculation of projected free cash flow at the moment.
Utilization of Projections
This presentation Includes projections with respect to the Organization and CENTRA Technology, Inc.. The organization’s independent auditors have not audited, reviewed, gathered, or performed any procedures with regard to the projections for the purpose of the inclusion within this demonstration, and consequently, didn’t express an opinion or offer any other form of assurance with respect thereto with the aim of this demonstration.