US government services providers Vectrus and Vertex have decided to join forces, saying the broader portfolio and increased scale of the merged company will improve their ability to compete for national security contracts.
“The combination of Vectrus and Vertex will create a stronger, more diversified company and one of the leading providers of critical mission solutions and support to defence clients globally,” Vectrus CEO Chuck Prow said on 7 March.
The new entity will have about USD3.4 billion in annual revenue and about 14,000 employees. It will be based in Northern Virginia and will be listed on the New York Stock Exchange.
Prow and Vectrus chief financial officer (CFO) Susan Lynch will become CEO and CFO of the new firm, respectively. Executives from Vectrus and Vertex will fill the rest of the leadership team.
Under the all-stock merger, Vertex shareholders will own about 62% of the combined company and Vectrus shareholders will own about 38%. Vertex is majority-owned by US private equity firm American Industrial Partners, while Vectrus is publicly traded.
The transaction, which the Vectrus board of directors approved unanimously, is expected to close in the third quarter of 2022 after receiving regulatory and Vectrus shareholder approval. A new name for the combined company will be revealed after the merger is completed.
The announcement came three months after Vertex acquired Raytheon Technologies Corporation's sustainment and training unit, gaining more than 2,000 employees. Vectrus' recent acquisitions include military base security system provider Advantor Systems, information technology business HHB Systems, and defence and intelligence services company Zenetex.
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