Cerberus to Acquire DynCorp for About $1 Billion

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Cerberus to Acquire DynCorp for About $1 Billion
Private-Equity Firm Pursues Broader Government-Related BusinessWith $1 Billion Deal, as LBOs Make a Comeback.ArticleComments (3)more in .By PETER LATTMAN
Cerberus Capital Management LP struck a deal to acquire defense contractor DynCorp International Inc. for about $1 billion, as the New York private-equity firm looks to expand its portfolio of government- and military-related businesses.

A buyout of DynCorp, which also includes the assumption of $500 million of debt, would be Cerberus's biggest acquisition since its bet on the recovery of the U.S. auto industry at the peak of the credit boom. The firm's two investments in car maker Chrysler LLC and auto lender GMAC LLC were largely wiped out and the companies were bailed out with billions of dollars in government aid.


Now Cerberus is looking to the U.S. government for business. The firm, run by billionaire deal maker Steven Feinberg, has a number of investments in companies of which the U.S. government is the primary client. Cerberus also has former U.S. Vice President Dan Quayle and former U.S. Treasury Secretary John Snow on its payroll.

Other Cerberus defense-related holdings include military contractor IAP Worldwide Services and an investment in satellite provider GeoEye Inc. The firm is also readying an initial public offering of shares in Freedom Group Inc., one of the world's largest rifle-and-ammunition manufacturers, with a stable of brands that includes Remington and Bushmaster. In 2008 Cerberus also looked at investing in Blackwater USA, the private-security contractor since renamed Xe Services LLC, according to people familiar with the firm, but the deal never came about.

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