DLH Holdings (Nasdaq: DLHC) has purchased Grove Resource Solutions Inc. for $185 million as part of efforts to expand its information technology modernization and cybersecurity offerings for federal government customers.
Bethesda, Maryland-based GRSi has approximately 700 employees and has been providing cybersecurity, cloud-based enterprise modernization, systems engineering, technology insertion and other IT support services to the U.S. Navy, U.S. Marine Corps, National Institutes of Health and other military and civilian agencies for nearly two decades, DLH said Thursday.
GRSi will operate as a wholly owned subsidiary of DLH and is expected to contribute about $140 million in annual revenue with a backlog of approximately $550 million.
Zachary Parker, president and CEO of DLH, said the acquisition elevates the company’s IT and engineering capabilities and provides the scale DLH needs to compete and grow in the federal marketplace.
DLH said it funded the transaction through an amendment to its secured credit facility. First National Bank of Pennsylvania served as agent, while F.N.B. Capital Markets, Atlantic Union Bank and M&T Bank acted as joint lead arrangers.
Baird advised GRSi on the deal’s financial aspect.
KippsDeSanto & Co. served as DLH’s financial adviser, while Holland & Knight and Becker & Poliakoff acted as the company’s legal advisers. DLH tapped Baker Tilly, Lockton Companies and Wolf Den Associates for consulting services with regard to the transaction.
DLH said it will hold a conference call on Tuesday, Dec. 13, provide additional terms of the purchase in upcoming Securities and Exchange Commission filings.