Contract Merger: PAE to Buy CSC’s Applied Tech Division for $175M

May 30, 2013 | OVERSEAS INTEL

Virginia-based Computer Sciences Corporation has reached a definitive agreement with Pacific Architects and Engineers – PAE for the sale of its base operations, aviation and range services business unit, Applied Technology Division (ATD), for $175 million in cash. CSC acquired ATD with the 2003 purchase of DynCorp.

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CSC will sell the aviation maintenance, base operations and maintenance, test and training range and space range businesses of ATD, while retaining the division’s training and simulation business. ATD currently performs work at more than 20 client locations in the continental United States

“The sale of ATD supports our realignment of company assets with our strategy of leading into the next generation of technology solutions and services, including cybersecurity, big data and cloud computing,” said CSC President and CEO Mike Lawrie.

PAE’s dedicated focus providing mission-critical services to the U.S. government and its allied partners will ease the transition for clients and employees, a CSC release said. ATD’s senior management team and its approximately 5,400 employees will transfer to PAE as part of the agreement.

In fiscal year 2013, ATD revenue was approximately $760 million with low-to-mid single-digit operating margins. ATD revenue has been reported within CSC’s North American Public Sector (NPS) and will be recast as discontinued operations.

The transaction is subject to customary closing conditions, including the receipt of various consents and an anti-trust clearance under the Hart-Scott-Rodino Act. CSC expects to close the transaction in the summer of 2013.

Pacific Architects and Engineers – PAE, a leading provider of global mission services, also announced that it has entered into a definitive stock purchase agreement with CSC, to purchase its Applied Technology Division. The transaction is expected to close this summer.

“The Applied Technology Division has a long and distinguished heritage of providing quality services to the U.S. Department of Defense, NASA and other government customers,” said PAE President Mike Dignam. “This acquisition is in line with our strategy to expand PAE’s strong portfolio by adding companies with proven capabilities and a customer-focused workforce culture. We look forward to working with the Applied Technology Division as we together address the opportunities in today’s dynamic market.”

The Applied Technology Division is comprised of approximately 5,400 employees who provide aviation maintenance, base operations and maintenance, test and training range and space range support of critical U.S. Government installations.

The acquisition of the Applied Technology Division will introduce military and space testing and training services as a new capability in PAE’s portfolio, and will significantly increase the number of PAE clients in the federal services market.

For more than fifty years, PAE has provided training, logistics, and operations and maintenance services to support complex missions for customers around the world. PAE currently employs approximately 10,000 people in more than 60 countries and is headquartered in Arlington, Va.

Contract Award: $54M Contract Extension in Djibouti and Kenya

March 1, 2013 | CONTRACTS

The size of the U.S. military footprint in Africa has increased since the creation of U.S. Africa Command in October 2008. At the end of October 2008, there were about 2,600 U.S. military personnel and Department of Defense civilians on the African continent or on ships within the command’s area of responsibility. The number today is about 5,000, more than half of which represents the service members who serve tours at Camp Lemonnier in Djibouti, with the remainder serving on a temporary basis ranging from a few days to a few weeks. Much of this change is attributable to an increase in the number of exercises and military-to-military engagement programs in order to better enable African nations and regional organizations to strengthen their defense capabilities. On a much smaller scale, it also reflects a modest increase in the staff sizes of DOD offices resident in U.S. embassies, which average just a small number of staff members.

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Contract Award: $149M to Support Colombian National Police Aviation Program

November 1, 2012 | CONTRACTS

ARLINGTON, Va., – PAE has been awarded a contract from the U.S. Department of State (DoS) Bureau for International Narcotics and Law Enforcement Affairs (INL) to provide administrative, technical, maintenance, training, and logistics/procurement support to the Colombian National Police Aviation Program (ARAVI), which supports counternarcotics efforts throughout the country. The value of the contract is approximately $149M for a period of performance consisting of one base year with the possibility of four one-year option periods.

“PAE has supported the DoS INL mission for seven years with Rule of Law and Justice Sector Support, and we are honored to expand our relationship to include aviation support for such a critical program,” said Mike Dignam, CEO of PAE. “Similar to our mission with the DoS INL Civilian Police program, the work that we perform under ARAVI will not only provide immediate operational support to a critical civic institution, it will also build capacity in-country by training maintenance support personnel and providing critical logistics support.”

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