Defense Base Act Compensation Blog

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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

One Response to “DynCorp shareholders profit well on proposed sale”

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