Global Defense & National Security Systems Inc.(“GDEF”), a special purpose acquisition company focused on the U.S. defense and national security sector, and privately-held STG Group, Inc. (“STG”), a Reston, VA-based provider of cyber, software and intelligence solutions to the U.S. government, announced on June 9 that they have entered into a definitive agreement to form a strategic business combination (the “combination”). The combination, with an approximate value of USD165.5m through a cash and stock transaction, is expected to provide STG with capabilities and capital in order to pursue growth opportunities.
STG is a specialist provider supporting more than 50 U.S. federal agencies. It operates across three key segments: cybersecurity and secure information systems; software development, systems and services; and intelligence and analytics. GDEF was established by the leadership of Global Strategies Group, the international defense and national security company, and completed its initial public offering in October 2013 with the strategy to build a mission focused mid-tier technology provider.
The combination is expected to create significant opportunities for growth by combining STG’s broad client base and significant differentiated capabilities with GDEF’s extensive network of government and industry relationships and business best practices. The combined entity intends to pursue acquisitions of innovative mission-critical companies to enhance and complement STG’s current capability and serve a large addressable market.
“We look forward to combining capabilities with GDEF to strengthen and grow our support for our clients,” said Simon Lee, Founder, Chairman and CEO of STG. “I believe this path to becoming a public company will enable us to continue our history of customer service excellence; realize our full potential, providing the opportunity to scale and bring current and new capabilities to a wider customer base; and increase opportunities for our employees to grow professionally. GDEF’s operational and investment expertise and relationships will be vital as we seek to grow, and broaden our business in priority spending areas.”
Mr. Lee added, “I am also very pleased to have the added expertise of a world-class board of directors, with a wide range of experience across the U.S. defense and national security sectors. I look forward to the valuable contributions they will bring as we continue to meet the changing needs of our clients.”
Damian Perl, GDEF Chairman, said, “When we launched GDEF in 2013, our stated intent was to combine with agile companies with a sound business base and next generation capabilities aligned with U.S. defense and national security priorities. That is exactly what we are doing with STG, and why we are so excited about this combination. STG is an industry specialist with critical capabilities, a highly diverse and long standing customer base and proven performance. This transaction gives us the opportunity to work together in building a leading provider of mission-critical support in this highly sophisticated market, leveraging STG’s existing relationships and GDEF’s operational, industry and M&A expertise. We are very confident that we can create value for investors, clients and employees through stronger organic growth, taking STG’s capabilities to more customers and integrating new, complementary capabilities.”
Source: Global Defense & National Security Systems, Inc.