Kforce Agrees To Sell Federal Government Solutions To ManTech
Zacks Investment Research | Mar 03, 2019 08:36PM ET
Kforce Inc. (NASDAQ:KFRC) is selling its federal government solutions business — Kforce Government Solutions, Inc. (KGS) — to ManTech International Corporation (MANT) for an aggregate cash purchase price of $115 million.
The company entered into a stock purchase agreement with ManTech on Feb 28, which is expected to close by Mar 31. More than 500 KGS employees will join ManTech.
The sale does not include Kforce’s federal government product business TraumaFX, for which strategic alternatives are being explored.
Kforce to Increase Focus on Core Businesses
The divesture will enable Kforce simplify business model and increase focus on the core Technology and Finance and Accounting businesses. Net proceeds from the sale after taxes and transaction cost are expected to be around $90 million, which will be used for share repurchases.
The company expects that improved profitability and repurchases will make the divesture EPS neutral or better on an annualized basis.
We firmly believe in the strong secular drivers within the commercial technology space and, with this divestiture, virtually all of our revenues are derived from domestic professional and technical staffing services and solutions,” said David L. Dunkel, Chairman and Chief Executive Officer of Kforce.
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