Welcome to Merger Monday. $661 million (market cap) DynCorp (DCP), a Department of Defense security contractor — they are, among other things, training the local police force in Afghanistan — is being taken private by P.E. firm Cerberus Capital Management, LP, the company announced, for $1.5 billion including the cost of picking up DCP’s debt. The deal values DynCorp at $17.55 per share, a 50% premium to the price on Friday.
Hence, today, DCP stock is up $5.66, or 48%, at $17.41.
Cerberus managing director Tim Price said the deal was part of growing the firm’s successful portfolio in government services.
And Boots & Coots (WEL), a $188.3 million maker of equipment for oil and natural gas drilling, is being bought out by Haliburton (HAL), the companies said, for a mixture of cash and stock adding up to $3 per WEL share, or roughly $240 million at WEL’s 80 million shares outstanding.
The deal involves $17.3 per share in cash and $1.27 per share of Haliburton stock for each WEL share. Boots’s line of products will become a “new product service” inside of Haliburton, merged with the latter’s existing “coiled tubing and hydraulic worker operations,” Haliburton said.
Haliburton executive Marc Edwards said in the company press release that digging for gas “requires increasing levels of pressure control and well intervention,” hence the need for Boots’s products.
WEL stock on the American Stock Exchange was not trading before market.
(And what are the roots of Boots & Coots? �Two founders, Asger “Boots” Hansen and Edward Owen “Coots” Matthews, who left a predecessor company, Red Adair, in 1978 to form their own company dedicated to putting out oil well fires.)
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