ManTech to buy Sensor Tech for $242 mn

BANGALORE, INDIA: ManTech International Corp said it agreed to buy privately held Sensor Technologies Inc for $242 million in its biggest deal to expand its presence in the high-end defense and intelligence market.

Sensor Technologies, a Red Bank, New Jersey-based provider of IT services to the U.S. Army, is a prime contractor of Strategic Services Sourcing (S3) program and is expected to see revenue growth of about 32 percent in 2010.

"The price that they paid for the acquisition seems very reasonable given those sort of growth prospects and that the S3 contract ... certainly ties into ManTech's strength," Jesup & Lamont analyst Alex Hamilton said.

Fairfax, Virginia-based ManTech, a provider of information technology services to federal customers for national security programs, expects the deal to add to its earnings in 2010.

"With the defense appropriation bill on track and a clear mission and strategy for Afghanistan, this acquisition allows us to provide more direct support to the U.S. Army as it continues its overseas operations," George Pedersen, ManTech's chief executive, said in a statement.

Company spokesman Stuart Davis said the EBITDA multiple for this deal could be between 7 and 8 for 2010. Amortization cost would be around $15 million, he said.

Davis also said the company would make more acquisitions going forward.

ManTech has completed 14 acquisitions valued at over $547.6 million since it went public in February 2002, according to Reuters data.

It expects to fund the Sensor acquisition from cash on hand and borrowings under its senior revolving credit facility.

Sensor Technologies, which is expected to record $340 million revenue in 2009, was advised by Lazard for the transaction.

Separately, in a regulatory filing, ManTech said it amended its credit facility with a syndicate of lenders, including Bank of America.

According to the amended terms, ManTech can incur additional unsecured debt and can increase capacity to repurchase its capital stock.

It also obtained additional commitments of about $30 million from its lenders.

ManTech shares were up more than 4 percent at $47.33 in morning trade Monday on Nasdaq. They have gained more than 39 percent until Friday since touching a year-low in May.