Dynamics Research Corporation to Acquire Kadix Systems
31 Julho 2008 - 10:15AM
PR Newswire (US)
Acquisition Enhances DRC's High-End Management Consulting
Capabilities and Broadens Presence in Homeland Security and Other
Critical Federal Markets ANDOVER, Mass., July 31
/PRNewswire-FirstCall/ -- Dynamics Research Corporation
(NASDAQ:DRCO), a leading provider of innovative engineering,
technology and information technology services and solutions to
federal and state governments, today announced it has signed a
definitive agreement to acquire Kadix Systems, LLC, a rapidly
growing, high-end management consulting firm. Kadix maintains
practice specialties in organizational change, human capital,
information technology, public and environmental health and
learning and organizational development. It is focused on the U.S.
Department of Homeland Security (DHS), Marine Corps information
technology, military medical health, and federal civilian markets.
"Kadix Systems' high-end management consulting capabilities fully
complement DRC's current core competencies in IT infrastructure,
business intelligence, business transformation and training and
enable greater access to key markets that we have targeted for
growth," said Jim Regan, DRC's chairman and chief executive
officer. "We look forward to welcoming Kadix employees to the DRC
family of dedicated professionals serving our nation's highest
priorities. We are committed to strategic growth that expands the
mission-critical management and consulting work we provide to
clients, fosters our long-standing culture of quality and
excellence and enhances shareholder value." Kadix Systems currently
has about 270 employees and is headquartered in Arlington, Va. with
additional offices in Greater Washington, Aberdeen, Md., and Fort
Sam Houston, Texas -- areas that are targeted for significant
expansion due to the DOD BRAC. About 95 percent of Kadix' contracts
have been awarded as prime and approximately 40 percent are
performance-based. Doug Layman, Kadix' President, will be appointed
DRC Senior Vice President and Group Manager and continue to lead
Kadix' business operations as a fourth operating unit, reporting
directly to Mr. Regan. Mr. Layman said, "We are extremely excited
to join the DRC family and leverage our combined capabilities to
quickly create stronger expansion with both existing and new
customers in target growth markets. DRC provides long-term
continuity for our senior management team and expanded professional
development opportunities for our employees. With a mutual regard
for integrity and an exemplary track record of quality customer
service, DRC is a natural fit for Kadix." Kadix Systems has
outstanding visibility into all DHS program management and
management consulting efforts. It is one of two companies to have
prime contracts on both the DHS Enterprise Acquisition Gateway for
Leading Edge Solutions (EAGLE) contract (functional area 5 --
Program Management and functional area 3 -- Independent
Verification and Validation Services) and DHS Program Management
Strategic Sourcing (PMSS) vehicles. Terms of the purchase agreement
include a cash price of $42 million with the potential for
additional consideration of up to $5 million, based on the
achievement of certain conditions. Kadix Systems, LLC reported
revenue and earnings before interest, taxes, depreciation and
amortization for the year ended December 31, 2007 of $23.0 million
and $3.8 million, respectively. For tax purposes, the transaction
will be treated as an asset purchase resulting in tax benefits to
DRC, which have an estimated value of $10 million. Concurrent with
the transaction, DRC will restructure its credit agreement with its
current bank group, which is led by Brown Brothers Harriman &
Co. and includes Bank of America and TD Banknorth, into a $40
million term loan and a $25 million revolving credit facility. The
transaction is expected to close by early August 2008. KippsDeSanto
& Co. is acting as exclusive financial advisor to Kadix in this
transaction. DRC management will further discuss the benefits of
this acquisition on its previously scheduled second quarter 2008
earnings conference call to be held at 4:30 p.m. ET today. The call
will be available via telephone at (877) 741-4251, and accessible
via Web cast at http://www.drc.com/. About Dynamics Research
Corporation Dynamics Research Corporation (DRC) is a leading
provider of mission-critical technology management services and
solutions for government programs. DRC offers forward-thinking
solutions backed by a history of excellence and customer
satisfaction. Founded in 1955, DRC is a publicly held corporation
(NASDAQ:DRCO) and maintains more than 25 offices nationwide with
major offices in Andover, Massachusetts; Reston, Virginia; and
Fairborn, Ohio. For more information please visit our website at
http://www.drc.com/. Forward-Looking Disclaimer Safe harbor
statements under the Private Securities Litigation Reform Act of
1995: Some statements contained or implied in this news release,
may be considered forward-looking statements, which by their nature
are uncertain. Consequently, actual results could materially
differ. For more detailed information concerning how risks and
uncertainties could affect the company's financial results, please
refer to DRC's most recent filings with the SEC. The company
assumes no obligation to update any forward-looking information.
CONTACTS: Investors: Dave Keleher Media: Duyen "Jen" Truong SVP and
Chief Financial Officer Sage Communications (for DRC) 978.289.1615
703.584.5645 DATASOURCE: Dynamics Research Corporation CONTACT:
Investors, Dave Keleher, SVP and Chief Financial Officer of
Dynamics Research Corporation, +1-978-289-1615, ; or Media, Duyen
"Jen" Truong of Sage Communications for Dynamics Research
Corporation, +1-703-584-5645, Web site: http://www.drc.com/
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