Houlihan Lokey Advises Alion Science and Technology on the Divestiture of its Naval Systems Business Unit

Houlihan Lokey is pleased to announce that Alion Science and Technology Corporation (Alion), a portfolio company of Veritas Capital, has divested its Naval Systems Business Unit (NSBU) to Serco Group plc (LSE:SRP) (Serco) for $225 million. NSBU is a leading provider of naval design, systems engineering, naval architecture, and production and lifecycle support services to the U.S. Navy, U.S. Army, and Royal Canadian Navy. The transaction closed on August 1, 2019.

Houlihan Lokey leveraged its unique insight into both companies to complete a transaction with substantial strategic value to all parties. The divestiture of Alion's NSBU to Serco highlights the strong market for well-positioned government services and technology businesses and illustrates several key themes:

• The transaction continues a recent trend of high-profile transactions in the government services and technology sector being completed by buyers headquartered "outside the Beltway." This is Serco's largest acquisition since 2011 and will be its third transaction in the sector. It also represents Serco North America's largest acquisition since 2008.

• Serco's strong attraction to the business was driven, in part, by NSBU's impressive leadership position in the naval systems engineering market. NSBU enjoys a marquee position providing differentiated engineering services and support to virtually every U.S. naval platform, and has built a best-in-class platform through the acquisition of assets out of JJ McMullen and the SETA business of Anteon.

• The transaction allows Alion to continue its focus on advancing technologies and systems in the areas of C5 systems, ISR solutions, artificial intelligence, cyber solutions, electronic warfare technology, and Live, Virtual, Constructive (LVC) training systems.

Solving some of the nation's most complex national security challenges, Alion works side by side with fefense and intelligence communities to design and deliver advanced engineering solutions to meet current and future demands. With global industry expertise in big data, analytics, and cyber security; artificial intelligence and machine learning; LVC training; electronic warfare and C5ISR; and rapid prototyping and manufacturing, Alion delivers mission success where and when it matters most. Based just outside of Washington, D.C., Alion helps its clients achieve practical innovations by turning big ideas into real solutions.

Veritas Capital is a leading private equity firm that invests in companies that provide critical products and services—primarily technology and technology-enabled solutions—to government and commercial customers worldwide, including those operating in the aerospace and defense, healthcare, technology, national security, communications, energy, government services, and education industries. Veritas seeks to create value by strategically transforming the companies in which it invests through organic and inorganic means.

Serco is a leading provider of public services. Their customers are governments or others operating in the public sector. Serco gains scale, expertise, and diversification by operating internationally across five sectors and four geographies: defense, justice, and immigration, transport, health, and citizen services delivered in the UK and Europe, North America, Asia-Pacific, and the Middle East.

Houlihan Lokey served as the exclusive financial advisor to Alion and Veritas Capital.

Houlihan Lokey's Aerospace, Defense & Government (ADG) Group is a leading M&A advisor to aerospace, defense, and government services companies in the U.S. Since 2016, the firm has closed more than 65 transactions worth more than $10 billion in enterprise value. With a staff of approximately 30 investment bankers in Washington, D.C., London, and Los Angeles, Houlihan Lokey's ADG practice is among the largest dedicated industry banking groups worldwide.