Acquisition will combine organizations with leading federal digital transformation capabilities and trusted, best-in-class digital reputations

Summary

Liberty's leading digital solutions—including robust cloud, Low Code / No Code and DevSecOps capabilities—will complement Booz Allen's powerful digital transformation portfolio and help clients achieve more efficient, effective transformational change
The acquisition continues to accelerate Booz Allen's digital transformation growth and further distinguishes the firm's unique market position, aligned with its strategic focus on delivering highly technical, mission-centric work for federal clients
The transaction is expected to close in the first quarter of Booz Allen's Fiscal Year 2022 and is subject to customary closing conditions
Upon closing, the transaction will be immediately accretive to Booz Allen's revenue growth rate, adjusted EBITDA margin, and adjusted diluted earnings per share

Booz Allen Hamilton (NYSE:BAH) announced today that it has entered into a definitive agreement to acquire Liberty IT Solutions, LLC, a leading information technology and services firm, for $725 million. The acquisition will broaden and deepen Booz Allen's digital solutions capabilities, expand its talent base and service delivery models, and strengthen its ability to work with strategic industry partners to help clients adapt and transform.

Liberty is headquartered in Herndon, VA, with a national presence including Exton, PA and a dedicated Agile Center of Excellence in Melbourne, FL. The company is a leading digital partner driving transformation across the federal IT ecosystem and employs approximately 600 solution architects, engineers, and other technical staff.

"This acquisition supports our long-term strategy to drive continued growth by investing in innovative technologies and talent at scale," said Horacio Rozanski, President and Chief Executive Officer of Booz Allen. "The addition of Liberty strengthens our unique market position as a leader in digital transformation, accelerates already robust growth in our health business and beyond, and delivers value for our people, our clients, and our shareholders."

The combination of Booz Allen's and Liberty's people and capabilities will give clients access to a deeper range of advanced, scalable technology solutions and deep digital expertise. This will create a powerful digital transformation portfolio, including:

End-to-End Digital Solutions: Liberty is a leading digital modernization organization that brings industry-recognized leadership in API development, as well as the implementation of cloud and Low Code / No Code (LCNC) solutions. Its successful IT modernization track record has quickly established Liberty as a top-tier provider of solutions in the federal space. Liberty will enhance Booz Allen's ability to deliver end-to-end digital solutions for client—blending leading technologies and practices in smart cloud strategies, secure architecture, API-first design, Agile development, DevSecOps, human-centered design, and change management to drive technology adoption and deliver rapid and reliable value across a variety of markets.

Expanded Salesforce Capabilities: Booz Allen clients will have access to a broader suite of digital transformation and strategic Salesforce capabilities through more channels. Liberty is recognized as a Salesforce Navigator Expert for its demonstrated thought leadership in the Public Sector category, as well as proven delivery on the largest and most complex projects while achieving the highest standards of customer success. Its portfolio includes 70+ successful Salesforce projects and production scale implementations; 140+ Salesforce architects, administrators, managers, and developers; and 340+ Salesforce certifications.

Advanced Technology Integration: By integrating Booz Allen's capabilities in artificial intelligence, machine learning, cybersecurity, and other advanced technologies across an expanded digital solutions portfolio, clients will have access to an even broader and deeper range of transformative technologies.

Strategic Growth: Liberty has built a backlog of more than $2 billion in digital transformation work over the past 18 months. The acquisition is expected to create significant opportunities through meaningful revenue synergies and be a growth driver within Booz Allen's federal portfolio.

"As the government pushes to accelerate the modernization of IT systems to increase efficiencies and improve outcomes, this acquisition will strengthen our ability to meet their critical needs," said Kristine Martin Anderson, Executive Vice President at Booz Allen. "The addition of the Liberty team and capabilities will help us meet those needs together, propelling our digital transformation journey by blending deep technical expertise with more than a century of consulting heritage."

The transaction allows Liberty to expand its LCNC capabilities through Booz Allen's broad reach across the federal market. Liberty employees will be a part of Booz Allen's network of remote solution centers, including its digital hub in Charleston, SC.

Chris Bickell, Partner at Liberty, said of the announcement, "Booz Allen and Liberty share a deep commitment to helping organizations achieve their goals through best-in-class solutions delivered with integrity, courage, and ingenuity. By pairing Liberty's leading Salesforce and LCNC qualifications with Booz Allen's advanced technologies and proven people, processes, and systems, we are scaling that critical support to deliver the essential transformation that clients need."

Booz Allen expects the transaction to be immediately accretive to Booz Allen's revenue growth rate, adjusted EBITDA margin, and adjusted diluted earnings per share upon closing. Booz Allen has sufficient available cash to fund the transaction but is exploring final funding sources. Net leverage of ~2.5x is expected at close.

The transaction is expected to close in the first quarter of Fiscal Year 2022 and is subject to customary closing conditions. Booz Allen will provide guidance on the next earnings call on May 21st, concurrent with the reporting of its results for the fourth quarter and full year of Fiscal Year 2021 ending March 31, 2021.

Jefferies LLC is serving as exclusive financial advisor to Booz Allen, and King & Spalding LLP is serving as legal advisor in connection with the transaction. Booz Allen retained PwC as accounting and tax advisor and Avascent for strategic industry advisory services. Baird is serving as exclusive financial advisor to Liberty, and Holland & Knight LLP is serving as legal advisor in connection with the transaction.

Booz Allen Hamilton will host a conference call this morning, May 4, 2021, at 8:45 a.m. EDT to discuss the transaction. Analysts and institutional investors may participate on the call by dialing (800) 708-4539; International: +1 (847) 619-6396; using the passcode 50160440. The conference call will be webcast simultaneously to the public through a link on the investor relations section of the Booz Allen Hamilton website at investors.boozallen.com. A replay of the conference call will be available online at investors.boozallen.com beginning at 1 p.m. EDT on May 4, 2021 and continuing for 30 days.

A supplemental presentation will be available on the investor relations section of the Booz Allen Hamilton website at investors.boozallen.com.

About Booz Allen Hamilton

For more than 100 years, military, government, and business leaders have turned to Booz Allen Hamilton to solve their most complex problems. As a consulting firm with experts in analytics, digital, engineering, and cyber, we help organizations transform. We are a key partner on some of the most innovative programs for governments worldwide and trusted by its most sensitive agencies. We work shoulder to shoulder with clients, using a mission-first approach to choose the right strategy and technology to help them realize their vision. With global headquarters in McLean, Virginia, our firm employs about 27,600 people globally as of December 31, 2020, and had revenue of $7.5 billion for the 12 months ended March 31, 2020. To learn more, visit www.boozallen.com. (NYSE:BAH)

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Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission (the SEC), including in our Annual Report on Form 10-K filed with the SEC on May 26, 2020. All forward looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made and, except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

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