Science Applications International Corp’s $1.2 Billion Acquisition of Unisys

Centerview Partners LLC is serving as exclusive financial advisor and Sullivan & Cromwell LLP is serving as legal advisor to Unisys.

Unisys Corporation (NYSE: UIS), a leader in digital transformation solutions, today entered into a definitive agreement to sell the company’s U.S. Federal business to Science Applications International Corp. (SAIC) (NYSE: SAIC) for $1.2 billion. The transaction multiple of approximately 13x LTM 9/30/19 Adjusted EBITDA(5) represents a significant premium to Unisys’ trading multiple. Net proceeds are largely expected to be used to pay down debt and reduce pension obligations, thereby significantly improving Unisys’ balance sheet, its U.S. pension funded status and overall financial flexibility. The transaction was unanimously approved by the Unisys Board of Directors and is expected to close in the first half of 2020, subject to customary closing conditions.

Unisys intends to largely use the net proceeds from the sale to pay down debt and reduce its U.S. pension obligations by applying a portion of the net proceeds to its U.S. defined benefit pension plans.

In conjunction with the transaction, Unisys also announced today that it has adopted a Tax Asset Protection Plan (the “Plan”), which is designed to protect Unisys’ tax assets in contemplation of the sale discussed in this release. This Plan is similar to tax benefit protection plans adopted by other public companies with significant tax attributes. The Plan is designed to protect Unisys’ valuable tax assets by reducing the likelihood of an ‘ownership change’ through actions involving Unisys’ securities.

The S&C team advising Unisys is led by M&A partners Krishna Veeraraghavan (Picture) and Scott Crofton, and includes tax partner Davis Wang, intellectual property partner Mehdi Ansari, executive compensation partner Matthew Friestedt, finance partner Ari Blaut and antitrust partners Steve Holley and Ben Walker.

Involved fees earner: Mehdi Ansari – Sullivan & Cromwell; Ari Blaut – Sullivan & Cromwell; Scott Crofton – Sullivan & Cromwell; Matthew Friestedt – Sullivan & Cromwell; Steven Holley – Sullivan & Cromwell; Krishna Veeraraghavan – Sullivan & Cromwell; Benjamin Walker – Sullivan & Cromwell; Davis Wang – Sullivan & Cromwell;

Law Firms: Sullivan & Cromwell;

Clients: Unisys;

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Author: Ambrogio Visconti