Colorado Springs, CO-based Vectrus, Inc. announced on December 28 that it has signed a definitive agreement to acquire Herndon, VA-based Zenetex, a leading 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 critical 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.”
“Zenetex and Vectrus make an extremely powerful combination and I couldn’t be happier with this next step in our team’s journey,” said Mark Green, chairman and chief executive officer of Zenetex. “Our culture, mission, vision, and values are strongly aligned and founded on delivering successful service in support of our clients’ critical missions. The Zenetex capabilities, client access, and high performing teams complement the existing portfolio at Vectrus and will add additional value to both company’s clients while serving new markets with the combined power of our people.”
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.
Zenetex has a long history of providing integrated logistics, advanced engineering, IT, RDT&E, and virtual simulation focused on critical national security priorities and defense aviation platforms. The company also provides integrated security protection of physical assets, IP and computer systems as well as mission performance services focused on Intelligence, Surveillance and Reconnaissance systems for the Intelligence Community and classified programs. Additionally, Zenetex is a leader in providing full spectrum Maintenance, Repair & Overhaul services focused on improving mission readiness for critical defense aviation programs. The company brings with it a long history serving the U.S. Navy, Intelligence Community and foreign militaries, which together account for over 80% of the company’s revenue.
Source: Vectrus
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