The following summary is an industry segmented example of a CFIUS-reviewed transaction. Please refer to the 5/23/11 post for more information on this survey.
Global Defense Technology & Systems, Inc. (GTEC), of McLean, Virginia, now known as Sotera Defense Solutions, Inc. (Sotera), is a mid-sized national security technology company that delivers innovative systems, solutions and services to the U.S. Department of Defense, the U.S. Department of Homeland Security, other federal intelligence and law enforcement agencies and other parts of the other federal government. In March 2011, Sotera was acquired by Sentinel Acquisition Holdings Inc., an affiliate of Ares. Prior to its acquisition by Sentinel, GTEC was controlled by A. Damian Perl, a UK citizen.
Prior to being acquired by Sentinel, however, on November 4, 2010, GTEC announced that it had agreed to acquire Signature Government Solutions, LLC of Herndon, Virginia. The buyer’s press release stated that “The transaction is subject to customary closing conditions, including CFIUS approval.”
SGS delivers sophisticated information technology, cyber security and intelligence analysis services to the intelligence community. SGS had only 220 employees and 2010 revenues of $37 million. Despite is relatively small size, given its close connection with the U.S. national security and the foreign control of GTEC through Mr. Perl, the need for a CFIUS filing was clear. The transaction closed on December 18, 2010. The review timeline appears to have been 45 days.
In a matter still under CFIUS review, in September 2010 L-1 Identity Solutions, Inc. agreed to be acquired by Safran SA. L-1 offers security products and services aimed at protecting and securing personal identities and assets around the world. Safran is owned in part by French government and is a major factor in aerospace, defense and security.
The parties announced their proposed acquisition on September 17, 2010, stating expressly that it was subject to CFIUS approval. L-1 and Safran submitted a joint voluntary notice to CFIUS on November 24, 2010. The initial 30-day review period was completed on December 28. On that date, CFIUS advised the parties that it would proceed with a 45-day national security investigation of the pending merger. On February 11, 2011, after discussions with CFIUS, L-1 and Safran withdrew their initial filing and re-filed, so that they could re-start the review process and have additional time to continue to negotiate a mitigation agreement with CFIUS. That e-filing commenced a new national security 30-day review period that expired on March 15. On March 15, CFIUS informed the parties that it would proceed with a second 45-day investigation of the merger, expiring April 29. During the investigation period the parties continued to discuss a mitigation agreement. On April 29 L-1 announced that it and Safran were yet again withdrawing and re-filing their voluntary notice to yet again provide additional time for their negotiation of a mitigation agreement with CFIUS. The re-filing commenced the third 30-day review period. This time, L-1 stated that it expected the closing of the acquisition to occur by June 10. With this extended timeline, as of April 30, the CFIUS process had taken 157 days. If the closing occurs by June 10, the timeline will be 200 days.
The following post will address transactions in the general aviation equipment and industrial motors industries.