Vectrus has signed a definitive agreement to acquire Zenetex, a provider of technical and strategic solutions focused on enabling mission readiness, performance, and enhanced protection for defense and national security clients globally.
The acquisition adds new capabilities which will accelerate Vectrus’ converged infrastructure strategy and expands the company’s client base with new DoD, intelligence and foreign military clients. The transaction is valued at approximately $112 million, net of $11 million of expected tax benefits.
“I am excited to welcome the Zenetex employees to Vectrus,” said Chuck Prow, president and chief executive officer of Vectrus. “This important acquisition significantly enhances our capabilities across a number of high priority clients and accelerates our strategy to deliver a more integrated and comprehensive suite of solutions to our clients globally. Zenetex broadens our reach into the Intelligence Community and expands our engineering and digital technology offerings, which is critical as we expand our capabilities to help our clients’ transition to a more instrumented and converged approach to supply chain and facility management.”
The transaction value of approximately $112 million is net of an anticipated $11 million transaction-related tax benefit and represents a multiple of approximately 8.4x 2020E adjusted EBITDA, adjusted for estimated annual cost synergies.
For 2020, Zenetex is expected to generate revenue of over $200 million. The transaction is expected to be accretive to Vectrus’ 2021 adjusted diluted earnings per share and adjusted EBITDA margin. The transaction is expected to close in 2020, subject to customary closing conditions. Vectrus was advised by Skadden, Arps, Slate, Meagher & Flom LLP, Ernst & Young, Covington & Burling LLP, and Wolf Den Associates. Zenetex was advised by KippsDeSanto & Co. and Greenberg Traurig, LLP.
-AK
Arya has been a part of the Content & Research Team at Hrnxt.com. She is a keen observer of economic developments, emerging businesses, people in business and keeps a tab on latest happenings in the business environment.