PAE, a portfolio company of investment firm Platinum Equity, has agreed to merge with special purpose acquisition company Gores Holdings III (Nasdaq: GRSH) in a push to advance its strategic plan and growth efforts.
“This transaction will strengthen our capacity to deliver the most valuable, innovative services to our customers and expand into new national security markets,” John Heller, CEO of PAE and a 2019 Wash100 awardee, said in a statement published Friday.
The merger deal is expected to conclude in the first quarter of 2020, subject to approvals by Gores Holdings III stockholders and regulators and other customary closing conditions.
The boards of directors of both companies have unanimously approved the transaction. Upon the deal’s closure, Gores Holdings III will adopt the name PAE and the latter will become a publicly listed company with approximately $1.55B in initial enterprise value.
Platinum Equity and PAE’s minority owners will own approximately 28 percent of the publicly listed government services contractor.
The $400M in cash in SPAC’s trust account and a private placement worth $220M put up by additional investors led by Alec Gores, chairman and CEO of The Gores Group, will be used to fund the transaction.
Evercore and Deutsche Bank Securities served as Gore Holdings’ lead financial advisers in the transaction, while Weil, Gotshal & Manges LLP acted as legal adviser to the firm. Latham & Watkins LLP advised Platinum Equity and PAE on the deal’s legal aspect.
The capital markets advisers in the deal were Deutsche, Evercore, Morgan Stanley & Co. and BofA Securities. Moelis & Company also served as financial adviser.