Vectrus and Vertex Announce All-Stock Merger to Create Global Government Services Company; Chuck Prow quoted

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Vector and Vertex company entered into a merger agreement to combine their service offerings to meet the diverse needs of the defense industry.

The all-stock transaction will officially close in the third quarter of 2022 and aims to create a broader revenue stream in terms of locations, customers and contract types from the Department of Defense and other branches of government, the companies announced on Monday.

Together, Vectrus and Vertex are expected to deliver an arsenal of integrated services and lifecycle technology strategies ready to meet national security and modernization obligations.

Currently, Vectrus specializes in core operations services, supply chain and logistics, information technology and security. Meanwhile, Vertex’s core capabilities include aircraft maintenance, systems engineering, and integration and training programs for public and private sector customers.

“This highly strategic transaction builds on the accomplishments of both companies over the past few years and significantly accelerates our ability to deliver converged solutions,” said chuck bowCEO of Vectrus and eight-time winner of the Wash100 Price.

Prow will become CEO of the combined organization once the deal officially closes. Current Vectrus CFO, Susan Lynch, will continue in this role for the new company, while the rest of the leadership roster will be comprised of members from both companies.

CEO and President of Vertex Ed Boyington commented, “Vertex and Vectrus share a mission-driven foundation and cultural alignment. By joining forces with Vectrus, we will be better positioned to help the Department of Defense and government agencies achieve their goals and, in doing so, create a stronger organization.

The combined assets of the two companies represent pro forma revenue of approximately $3.4 billion and adjusted EBITDA of approximately $283 million for fiscal year 2021. The starting EBITDA margin profile will be 8 % with growth expectations.

There is also a backlog of $11.3 billion. After the merger is complete, Vertex shareholders have agreed to own 62% of the company, while Vectrus shareholders will own approximately 38%.

The name of the new company will be decided upon closing of the agreement in the third quarter of 2022. The headquarters will be based in northern Virginia.

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