Serco pays $423m for SI International

Aug 29, 2008 (Datamonitor via COMTEX) -- SINT | Quote | Chart | News | PowerRating -- UK-based support services provider Serco Group has agreed to acquire US-based SI International, a provider of information services and network applications to the federal government. Serco will pay $423m and will assume debt of approximately $87.3m.

SI International has 4,500 employees. Clients include the US Air Force, Army, Department of Defense, and 15 federal civilian agencies. The company said 99% of second-quarter revenue came from federal government contracts.

It will be integrated with Serco's North American unit in Virginia. The combined entity will be headed by the unit's chairman and chief executive Ed Casey, and will have 11,500 employees and revenue of approximately $1.3bn.

Serco said it expects the combined entity to provide annualized cost savings in excess of $10m from the end of the second full year of ownership. This acquisition is expected to be accretive to Serco's adjusted earnings in the first full year of ownership.

Serco CEO Christopher Hyman said: "The acquisition of SI International will significantly expand the scale and potential of Serco's North American operations. Our capabilities are highly complementary and together we will create a stronger organization that will have customers across all US armed forces, the US intelligence services, and a number of federal government agencies."

The transaction is expected to close by the end of 2008, subject to shareholder and regulatory approval.

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