Target: Six3 Systems Inc
Price: As much as $1 billion
Multiple: 12x to 14x EBITDA
Sponsor: GTCR LLC
Financial Advisers: Goldman Sachs Group Inc, JPMorgan Chase & Co
The Chicago-based private equity firm has hired Goldman Sachs Group Inc and JPMorgan Chase & Co to run a sale process for Six3, the sources said, and the auction is currently in the first round of bidding. Six3 has EBITDA of about $70 million, two of the sources added, and GTCR hopes to sell the company for as much as 12x to 14x that amount.
The sources asked not to be identified because the sale process is not public. GTCR and JPMorgan declined to comment, while Six3 and Goldman Sachs did not immediately respond to requests for comment.
Six3, founded in 2009 by GTCR in partnership with Robert Coleman, the former president of ManTech International Corp, serves the security intelligence community and the U.S. Department of Defense. Potential buyers could include major defense companies such as Lockheed Martin Corp, Raytheon Co, Boeing Co, TASC Inc and Booz Allen Hamilton Holding Corp, according to the sources.
Representatives of the companies either declined to comment or did not immediately respond to requests for comment.
With military and intelligence missions requiring more sophisticated technologies and support, McLean, Virginia-based Six3 has developed a niche that has been spared from cuts in defense spending due to the U.S. budget sequestration. The niche involves processing electronic signals and building intelligence surveillance and reconnaissance systems for the U.S. military and intelligence communities, according to its website.
Despite fierce competition in the sector, Six3’s organic revenue has risen 19 percent annually on a compounded basis since its formation due to its specialized technology, Standard & Poor’s said last year in a research note. Six3 has grown through acquisition of several other companies, most recently buying Ticom Geomatics Inc in April 2012 for an undisclosed amount.
Soyoung Kim and Greg Roumeliotis are correspondents for Reuters in New York.