This post by AM Law Daily had everything that I thought was pertinent to the story. So Xe has finally been sold, and for an estimated 200 million dollars.
I think what is really interesting with this acquisition is all the national security related stuff that goes along with buying a company like this. When you buy Xe, you are buying all the really complex and sensitive government contracts they are involved with. And like the article below pointed out, Michael Chertoff’s company (former Homeland Security Secretary) was heavily involved in making sure this was done correctly.
So what will USTC Holdings do with Xe, now that they bought it? Good question, but I am sure you won’t see a lot of change right off the get go. Matter of fact, you probably won’t see anything new with the company, other than it just having new owners. –Matt
Bingham, Mayer Brown Advising on Sale of Blackwater/Xe Services to Private Equity Group
December 17, 2010
By Brian Baxter
Xe Services, the private military contractor formerly known as Blackwater Worldwide, announced on Friday that it had been sold to a group of private equity investors with ties to company founder Erik Prince.
Terms of the transaction were not disclosed, but The New York Times puts the value of the deal at around $200 million. USTC Holdings, the investment group taking control of Xe, said in a statement that the deal includes all Xe companies that provide domestic and international security services, including the target’s training facility in Moyock, N.C.
Bloomberg reports that USTC is comprised of private equity firms Manhattan Partners and Forté Capital Advisors, whose managing partner, Jason DeYonker, has close ties to the Prince family. (Aaron Kanter serves as Forté’s chief compliance officer and in-house counsel.)
Bingham McCutchen is serving as outside counsel to USTC Holdings, according to a press release announcing the Xe acquisition. M&A partner T. Malcolm Sandilands, finance partner Ian Wenniger, government contracts of counsel Edward Kirsch, and associates Felix Kushnir, Smitha Sundar, Joyce Hsieh, Anna Kordan, and Marc Angelone led the team from the firm.
Conducting strategic due diligence on USTC Holdings’ behalf was the Chertoff Group, a risk management firm set up by former U.S. Department of Homeland Security secretary and current Covington & Burling senior of counsel Michael Chertoff, no stranger to high-profile deals with national security implications.
Mayer Brown corporate partners Christian Fabian and Elizabeth Raymond in Chicago are advising Xe, along with litigation partner Lee Rubin in Palo Alto and associates Erik Axelson, Jason Wagenmaker, and Joseph Hable. Fabian, who was out of the country on Friday and unavailable for immediate comment, previously counseled Xe on the sale of its Aviation Worldwide Services unit to AAR Corporation for $200 million earlier this year. The firm has handled litigation work for Xe, which prior to February 2009 was known as Blackwater. (Xe’s general counsel is Christian Bonat.)
Last month The Am Law Daily reported on Clifford Chance partner Wendy Wysong’s appointment as a special compliance officer for Xe. Wysong will spend at least the next three years overseeing export controls at the Moyock, N.C.-based company, which agreed in August to pay $42 million in fines in a settlement with the U.S. Department of State over hundreds of violations of U.S. export control regulations.
Reached by phone at her office in Washington, D.C., on Wednesday, Wysong says that USTC recognizes that it remains bound by the consent agreement reached by Xe this summer. “They have every intention of going forward [with it],” she says. “I’ve seen their budget and they plan to comply with the consent settlement agreement.”
Prince, who moved to Abu Dhabi in August, put Xe up for sale this summer after the company’s rebranding campaign. Terms of Xe’s sale to USTC state that Prince will no longer have an equity stake in the company or be involved in its management or operations.
Story here.