Vectrus, Inc. (NYSE: VEC) and the Vertex Company (Vertex) both have confirmed that they have inked an all-stock merger agreement to establish a leading global provider of mission-essential solutions. The merged company is expected to deliver greatly expanded technology and service capabilities.

Vectrus and Vertex will merge to form a stronger, more versatile firm that will be one of the world's leading providers of essential mission solutions and support to defense clients. Vectrus believed that this highly strategic acquisition builds on both firms' recent successes and considerably enhances its capacity to deliver integrated solutions while increasing value for its shareholders and other stakeholders.

Furthermore, the combined business is expected to provide a broad suite of integrated solutions and vital service offerings to support global national security readiness and transformation objectives. The merged firm will be well ready to address the mission-critical needs of its clients while offering cost savings, improved security, and reliability, and more strategic use of resources as U.S. and allied government clients move toward a consolidated environment.

Transaction Overview

As per the merger agreement, on a fully diluted basis, Vertex shareholders will hold nearly 62 percent of the merged firm, while Vectrus stockholders will hold nearly 38 percent. The acquisition values Vertex at around $2.1 billion, or roughly 9.5 times 2021 adjusted EBITDA after cost synergies of $20 million and the present value of Vertex's current tax characteristics of $160 million.