Global Defense Technology & Systems, Inc., a provider of mission-critical, technology-based systems, solutions and services for national security agencies and programs of the US government, today announced that it had entered into a definitive agreement to acquire Zytel Corporation (Zytel) for $26.8 million in cash. Zytel delivers Cyber Security & mission systems in support of the critical intelligence, counterterrorism, and cyber warfare missions of its national security clients.
The company is an industry leader in the design, development and deployment of next generation, net-centric mission solutions that collect and protect vital information, leveraging its core competencies in systems engineering and architecture, software development and intelligence analysis. The deal is expected to be immediately accretive to GTEC's diluted earnings per share and close in the fourth quarter of 2010.
Zytel's work is all classified and all of its employees are cleared at the Top Secret/Sensitive Compartmented Information level. The company has strong operating margins and expects to generate approximately $20 million in revenue in 2010 with continued rapid growth in 2011. The company's operations are based in the Ft. Meade, Maryland area.
John Hillen, GTEC's President & CEO, stated, "Zytel has an exceptional track record in delivering mission-focused cyber solutions to its Intelligence Community clients. By combining our core and complementary capabilities, both GTEC and Zytel can bolster the range of systems, solutions, and differentiated technologies we can provide to national security customers in support of their critical front line missions. Zytel's core capabilities in Cyber Security, mission systems architecture, high performance computing and intelligence analysis are critical tools in support of our nation's defense and add a further edge to GTEC's portfolio of services. We look forward to expanding our offerings as a combined enterprise."
Greg Hofstrand, Senior Vice President of Zytel added, "Our unique capabilities and penetration of a coveted Intelligence Community customer, provides a great complement to GTEC's counterterrorism expertise and intelligence customer footprint. GTEC provides additional professional development opportunities to Zytel employees and offers our customers a broader set of solutions. Equally important, GTEC shares our passion for the national security mission and provides us a business infrastructure to take advantage of larger and more complex opportunities to continue our impressive growth track record."
The transaction is subject to customary closing conditions, including CFIUS approval. GTEC currently has no debt outstanding and will use cash on hand and borrowings under its senior revolving credit facility to fund the transaction.
Source: Global Defense Technology & Systems
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