DynCorp shareholders profit well on proposed sale
Posted by defensebaseactcomp on April 12, 2010
Cerberus to take defense contractor DynCorp private in $1 billion deal
FALLS CHURCH, Va. (AP) – DynCorp International, which has helped train the national police in Afghanistan, said Monday that it is being bought out by private equity firm Cerberus Capital Management for $1 billion.
A recent decision to shift control of the training program from the State Department to the military may end a contract that DynCorp has held since 2003.
The company is challenging the decision.
DynCorp shareholders will receive $17.55 in cash for each share, a premium of 49 percent from Friday’s closing price of $11.75. The deal also includes debt that pushes its total value to $1.5 billion.
Under the terms of the deal announced Monday, DynCorp has 28 days to solicit proposals from other companies.
Shares of DynCorp International Inc. soared $5.72, or 49 percent, to $17.47.
DynCorp provides services such as aviation support in Iraq to helping flood victims in the U.S. It has contracts in Kuwait and Afghanistan.
Two possible drug-related deaths in Afghanistan by two contractors has raised concerns about how well the company selects and manages employees assigned to a police training contract that is considered key as the U.S. looks to hand over more of the security burden to the Afghans. Story here