Vectrus and Vertex to Combine

Vectrus, Inc. (NYSE: VEC) and The Vertex Company (“Vertex”) announced that they have entered into an all-stock merger to create a leading global provider of mission-essential solutions.

The combined company will offer significantly expanded technology and service capabilities, delivering a comprehensive suite of integrated solutions and critical service offerings to support national security readiness and modernization initiatives around the world.

As U.S. and allied government clients move toward a converged environment, the combined company will be well positioned to meet the mission-essential requirements of its clients while delivering cost savings, increased security and resiliency, and more strategic use of resources.

Upon closing of the transaction, Chuck Prow, CEO of Vectrus, will serve as CEO of the combined company, and Susan Lynch, CFO of Vectrus, will serve as CFO. The broader leadership team will be comprised of executives from both companies.

The combined company will introduce a new name post-closing and will maintain its listing on the NYSE. The company will be headquartered in Northern Virginia, with a significant operating presence maintained in other key locations in the U.S. and around the world.

The merger, which was unanimously approved by the Vectrus Board of Directors, is expected to close in the third quarter of 2022.

During a conference call with investors Monday, Vectrus CEO Chuck Prow said the transaction’s goal is to create a leader across the operations and logistics, aerospace, training and technology segments of the government services market.

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Vectrus Announces 2021 Results

“This year, Vectrus continued its strong momentum in the converged market, and our financial results for the fourth quarter and full-year 2021 underscore the successful execution of our growth strategy with year-on-year total and organic revenue growth of approximately 28% and 10%, respectively,” said Chuck Prow, Chief Executive Officer of Vectrus.

“Our team showcased its agility to meet the unique needs of our clients by successfully supporting several important missions, including Pacific Defender, a major contingency task order in INDOPACOM, supporting the Afghanistan refugee mission to support the Non-Combatant Evacuation Operation as well as supporting the Department of Defense with the establishment of a water supply system for military housing at Red Hill, Hawaii. Additionally, we demonstrated our ability to support operations of larger size and scope by phasing in all the CENTCOM task orders under the LOGCAP V Contract. These task orders provide substantial revenue visibility for the next several years.”

“This year, we also won the five-year, $44 million AFCAP V Saudi Foreign Military Sales Task Order, our first win in the Kingdom of Saudi Arabia, to provide base operation support to the Air Force, and we finished the year by winning the Fort Benning Logistics Support task order, a five-year, $250 million award under the Enhanced Army Global Logistics Enterprise (EAGLE) IDIQ Contract.

Fourth quarter revenue was $419 million up 18% year-on-year as compared to the same period last year. Revenue grew year-on-year as a result of the company’s two acquisitions on December 31, 2020. Organic revenue grew by $3.2 million, or 0.9%, reflecting the transition to LOGCAP V Kuwait and Iraq task orders and completion of certain programs, including the Afghanistan Evacuation Operation.