The deal includes $560m in cash and another $40m in preferred stock, as well as a 10% equity stake in the business, a PGS release states. The sale is expected to close in the first quarter of 2007.
PGS provides a range of consulting, integration, development and support services for government business processes and IT functions. The company has operations in the US, the UK, Argentina, Canada, and Mexico, with more than 5,500 employees worldwide.
The company pulled in approximately $530m in revenue in 2005, according to Eileen Rivera, vice president of communications for PGS. Of that figure, some $289m came from the US government, according to an annual list of federal contractors published by Washington Technology magazine.
But the majority of US revenue – $215m – came from federal civilian agencies. Rivera said the company’s work elsewhere in the world is similarly tilted toward the civilian side.
In the US, the company’s largest contract is with the Department of Health and Human Services to manage call center operations for the 1-800-MEDICARE help line, Rivera said. PGS last month won a huge $440m contract to continue supporting the contact center for an additional two and a half years.
The company also has substantial contracts with the Department of Education’s Federal Student Aid program and with the Department of Labor for an employee benefit electronic filing system. PGS’ work with the Pentagon includes an enterprise modernization project for its Defense Information Systems Agency, Rivera added.
The company posted an operating profit of $46m in 2005.
