PAE, Inc. (NASDAQ: PAE) is a global provider of operational solutions and outsourced services to the U.S. government, foreign allies, and other international organizations. Shares of the government contractor are surging 67% through early trading on Monday, October 25, 2021. Over the past three months, PAE has seen average daily volume of 518,240 shares. However, volume of 17.41 million shares or dollar volume of $172.01 million, has already exchanged hands through early trading on Monday.
Shares of PAE are rallying after the company announced that it has entered into a definitive agreement to be acquired by an affiliate of Amentum Government Services Holdings, LLC, in an all-cash deal valued at $1.9 billion. Under the terms of the agreement, PAE shareholders will receive $10.05 per share in cash, which represents a 70% premium compared to the stock’s closing price on October 22nd.
Amentum is engaged as a global technical and engineering services provider to national governments around the world. Amentum specializes in defense, security, intelligence, energy, and environmental applications.
The PAE Board of Directors has already unanimously recommended the approval of the merger agreement to its shareholders. However, PAE will have a “go-shop” period that extends through November 29, 2021. During this time, the company can actively seek alternative acquisition proposals.
“By achieving an approximately 70% premium over PAE’s closing price on October 22, 2021, PAE’s Board believes this transaction will deliver significant value for PAE’s shareholders. This is a historic milestone in PAE’s legacy of service to the U.S. Government spanning over 66 years,” said Marshall Heinberg, Chairman of the Board of Directors. “I want to commend Interim President and CEO Charlie Peiffer and the rest of the PAE management team for their outstanding work in getting the transaction to this point given many competing demands,” Heinberg said.
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