PAE finds buyer to take it public

M&A

PAE finds buyer to take it public By Ross Wilkers Nov 01, 2019

PAE changed hands from one private equity owner to another three years ago and now the company is moving to its next phase through a merger that will create a new publicly-traded government services company.

Falls Church, Virginia-based PAE said Friday will merge with Gores Holdings III, a special purpose acquisition company or “SPAC” sponsored by private equity firm The Gores Group in a deal they all expect to complete in the first quarter of next year.

The company then will go to the public markets with its current majority owner Platinum Equity and other minority investors collectively to hold approximately 28 percent of the equity.

PAE posted around $2.2 billion in revenue for 2016 and ended 2018 with $2.6 billion in sales, according to data from both an investor presentation filed by Gore Holdings and reports from Moody’s Investors Service. John Heller has led PAE as CEO since December 2013, when the company was at around $1.6 billion in revenue.

This transaction takes PAE down a different path than that of AECOM’s government services business, which was first announced in June as a spinoff from the parent to become a public company. Two private equity firms, including PAE’s former owner in Lindsay Goldberg, made a deal in October to acquire AECOM Management Services.

But in a similar manner, one of the things PAE is looking to do by merging with a SPAC and hence another financial sponsor is getting additional capital be a more active dealmaker given the constant drum of mergers and acquisitions in the market. PAE has made two acquisitions with Platinum Equity’s backing.

The Gore Holdings presentation filed to the Securities and Exchange Commission indicates PAE has at least $8.9 billion in cumulative

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