KeyW to Acquire Sotera Defense Solutions

The KeyW Holding Corporation announced that it has agreed to acquire Sotera Defense Solutions in an all-cash deal worth approximately $235 million, including an expected $46 million net present value related to acquired net operating loss carryforwards.  Sotera is projected to generate $225 million in revenue and $20 million in adjusted EBITDA in 2017.  The deal will nearly double KeyW with projected combined revenues of approximately $535 million in 2017 and yield approximately $7 million of cost synergies within 12 to 18 months.  KeyW expects the deal to be immediately accretive to 2017 adjusted EPS.  

Owned by Ares Management and with over 1,100 employees (80 percent have Top Secret clearance and above), Sotera provides enterprise IT, cybersecurity, data fusion and analytics, intelligence analysis, and C5ISR solutions to the Federal Government and Intelligence Community.  The deal will bring KeyW more than 12 prime IDIQ's and GWAC contracts, as well as key customers including FBI, DHS, and Army Intelligence.    

RBC Capital Markets and Guggenheim Securities are serving as financial advisors to KeyW.  Macquarie Capital and Sagent Advisors are serving as financial advisors to Ares Management and Sotera.  The deal is expected to close in the second quarter of 2017.