According to people familiar with the matter, Carlyle Group Inc., a private equity firm, is in advanced talks to acquire ManTech International Corp., a government contractor that also does IT services.
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People who asked not to be identified because of the information is private, said a deal could be announced as soon as this week. The deal values ManTech at $4 billion, according to the people.
An agreement isn't finalized and talks could still fall apart. Representatives for ManTech and Carlyle couldn't be reached for comment.
Carlyle and its peers have been sitting on mountains of dry power, which they have been looking to deploy through mergers and acquisitions in a volatile stock market.
Carlyle was part of a consortium that bought medical supply company Medline Industries Inc. for more than $30 billion last year, the second biggest M&A deal in 2021. The Chinese packaging firm HCP is close to completing a deal that will cost about $1 billion, according to Bloomberg News.
Private equity has recently gravitated toward US government contractors with an IT bent because they provide a steady stream of revenue. One of Carlyle's competitors, Veritas Capital, has consolidated several of these companies, including Perspecta Inc., which it acquired in a $7.1 billion deal to merge into its portfolio company, Peraton.
ManTech, based in Fairfax, Virginia, provides IT services, including analytics and cybersecurity, to US defense and intelligence agencies. It reported first-quarter net income of $31 million on revenue of $676 million on May 4. The previous year, it was $32 million on $633 million in revenue.
Its shares closed on Friday at $81.97 apiece, giving the company a market value of $3.4 billion. The company's stock price has risen 12% this year, a sharp contrast to the 16% drop in the S&P 500.
George Pedersen, who co-founded ManTech in 1968, served as chief executive officer until 2018 and as chairman until 2020. He retained his chairman emeritus title before retiring from the board in February.
Kevin Phillips replaced Pedersen as CEO and Chairman. According to Cowen Inc., Pederson and his family still own 49.9% of the company.
According to its website, Carlyle is an active investor in government services companies. One of its portfolio companies in the space, Novetta, was sold to Accenture Federal Services last year, according to a press release.
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