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ASGN Closes Acquisition of ECS Federal for USD 775m
Wednesday 04 April 2018

4 April 2018 - California, US-based IT and professional services company ASGN Inc., formerly known as On Assignment, Inc. (NYSE: ASGN) has closed the acquisition of Virginia, US-based government services contractor ECS Federal, LLC from Roy Kapani, the company's majority owner and founder, and private investment firm Lindsay Goldberg, the company said.

ECS will continue to operate under the ECS brand name and will also operate as a separate segment of ASGN.

The president of ECS, George Wilson, and the current ECS leadership team will continue to execute the strategy and oversee the day-to-day operations of the business.

Under terms of the definitive purchase agreement, ASGN acquired all of ECS' equity for USD 775m paid at closing.

In connection with the transaction, ASGN obtained a USD 1.6bn financing commitment from Wells Fargo. The committed financing consists of a USD 200m revolving credit facility and a USD 1.4bn term B loan.

Combined, ASGN and ECS is expected to be one of the largest IT and professional services firms in North America.

ASGN said ECS' government services solutions will complement and elevate its offerings and strengthen its position in IT and professional services.

ECS will become a division of On Assignment and continue to operate under the ECS brand name. This acquisition immediately introduces a company with the scale, contracts, capabilities, personnel, past performance and ability to compete for the largest opportunities in the Federal market.

ASGN said it intends to change its name to ASGN Inc. to better reflect its evolving position as a provider of human capital in IT and professional services solutions effective April 2, 2018.

ECS delivers cyber security, cloud, DevOps, IT modernisation and advanced science and engineering solutions to government enterprises.

For the year ended December 31, 2017, ECS estimates its revenues and Adjusted EBITDA (a non-GAAP measure) on a pro forma basis will be approximately USD 586.4m and USD 67.6m, respectively.

Estimated pro forma results assume a business acquired by ECS in April 2017 occurred at the beginning of the year. For 2018, ECS expects high single-digit year-over-year revenue growth.

ASGN is a providers of IT and professional services in the technology, creative/digital, engineering and life sciences sectors.

For the year ended December 31, 2017, On Assignment estimates its revenues and net income will be approximately USD 2.6bn and USD 157.7m, respectively and its adjusted EBITDA will be approximately USD 311.4m.

ASGN retained Sullivan and Cromwell LLP as legal counsel on the transaction, Latham and Watkins LLP as legal counsel on the secured financing commitment, Wells Fargo Securities, LLC as lead financial advisor, American Discovery Capital, LLC as financial advisor, Wolf Den Associates, LLC for strategic industry advisory services and Perkins Coie, LLP for support with government contracts.

ECS retained Cravath, Swaine and Moore LLP and Venable LLP as legal counsel and Robert W. Baird and Co., Houlihan Lokey, Inc. and SunTrust Robinson Humphrey as financial advisors.
Details
Date Published: 04/04/2018
Target: ECS Federal
Country: USA
Deal Size: 775m (USD)
Sector: Business and Consumer Services
Type: LBO
Financing: Cash
Status: Closed
Vendor: Roy Kapani, Lindsay Goldberg
Buyer: On Assignment
Buyer Advisor: Sullivan and Cromwell , Latham and Watkins , Wells Fargo Securities , American Discovery Capital , Wolf Den Associates , Perkins Coie
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