- Additional Proxy Soliciting Materials (definitive) (DEFA14A)
July 08 2011 - 5:31PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2)
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to Rule 14a-12
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SRA INTERNATIONAL, INC.
(Name of Registrant as Specified In Its Charter)
Not Applicable
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined):
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(4)
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its
filing.
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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Explanatory Note
On June 15, 2011, SRA International, Inc. (the Company or SRA) issued its Definitive Proxy
Statement (the Proxy) regarding a proposal that the Companys shareholders vote to adopt the
Agreement and Plan of Merger, dated as of March 31, 2011 (Merger Agreement), with Sterling Parent
Inc., a Delaware corporation (Parent), and Sterling Merger Inc., a Delaware corporation and a
wholly owned subsidiary of Parent (Merger Sub and, such transaction, the Merger). Parent and
Merger Sub are affiliates of Providence Equity Partners L.L.C. (Providence). Among other things,
the Proxy contained: (i) information in the Background of the Merger section as to meetings
between Dr. Ernst Volgenau, the chairman of the Companys board of directors and its controlling
shareholder, and certain entities bidding to acquire or merge with the Company, which occurred
between February 24, 2011 and March 11, 2011, and (ii) statements in the Opinion of
Financial Advisor to the Special Committee section that (a) the special committees
financial advisor in connection with the Merger, Houlihan Lokey Capital, Inc. (Houlihan Lokey),
and certain of its affiliates have provided certain financial or valuation advisory services to
Providence and certain of its portfolio companies and (b) affiliates of Houlihan
Lokey may have committed to invest in private equity or other investment funds managed
or advised by Providence.
This filing supplements those disclosures with the following related information:
On March 3, 2011, Dr. Volgenau discussed a potential strategic transaction with Strategic
Bidder B.
The meetings that occurred on February 24, 2011, February 28, 2011, March 3, 2011, and March
11, 2011 between Dr. Volgenau and Financial Bidder A, Providence, Strategic Bidder B and
Strategic Bidder C, respectively, were arranged by Houlihan Lokey at the direction of the
special committee, based on the special committees decision at its February 21, 2011 meeting
that the bidders who had submitted written indications of interest would be given an
opportunity to meet with Dr. Volgenau to discuss a potential transaction with him, including
possible rollover, voting or similar arrangements. During these meetings with bidders, Dr.
Volgenau expressed his desire that SRAs name, values and culture be preserved following a
transaction. No individuals from the special committee or its advisors (including Houlihan
Lokey) attended those meetings. After each meeting concluded, representatives of Houlihan
Lokey met with Dr. Volgenau to discuss the meeting, then subsequently updated the special
committee with the information gathered from Dr. Volgenau. This information included that
Dr. Volgenau had expressed his receptiveness to a potential transaction with each of the
bidders.
Based in part on information provided by Providence regarding Providence, its funds and its portfolio
companies, Houlihan Lokey has indicated to the special committee that, during the two years prior to
March 31, 2011 (the date of Houlihan Lokeys opinion to the special committee), (i) neither Providence nor its funds have paid any
fees to Houlihan Lokey, Inc. and its subsidiaries (including Houlihan
Lokey) for any services, and (ii) certain of
Providences portfolio companies paid Houlihan Lokey, Inc. and its subsidiaries
(including Houlihan Lokey) aggregate fees of approximately $3.5 million for certain financial
or valuation advisory services rendered to such portfolio companies
unrelated to the Merger.
Based in part on information provided by Providence regarding the funds managed or advised by Providence,
Houlihan Lokey has indicated to the special committee that neither Houlihan Lokey, Inc. nor any of
its subsidiaries (including Houlihan Lokey) has invested or committed to invest in such funds,
including the Providence funds involved in the Merger.
In the case captioned as
Southeast Pennsylvania Transportation Authority v. Dr. Ernst
Volgenau, et al.,
C.A. No. 6354-VCN (Delaware Chancery Court), the parties have informed the Court
that plaintiff no longer seeks to enjoin the shareholder vote on the Merger, and accordingly, the
Court canceled a hearing on June 30, 2011 that previously had been scheduled regarding plaintiffs
motion for a preliminary injunction. While plaintiff no longer seeks to enjoin the shareholder vote
on the Merger, plaintiff continues to otherwise pursue the claims in its case.
Forward-Looking Statements
Any statements in this report about future expectations, plans, and prospects for SRA,
including statements about the Merger and other statements containing the words estimates,
believes, anticipates, plans, expects, will, and similar expressions, constitute
forward-looking statements within the meaning of The Private Securities Litigation Reform Act of
1995. Factors or risks that could cause the Companys actual results to differ materially from the
results the Company anticipates include, but are not limited to: (i) the inability to complete the
Merger by an affiliate of Providence due to the failure (a) to obtain the requisite stockholder
approvals for the Merger contemplated by the Merger Agreement; (b) to satisfy other conditions to
the completion of the Merger contemplated by the Merger Agreement; or (c) to obtain the necessary
financing arrangements set forth in the debt and equity commitment letters delivered pursuant to
the Merger Agreement; (ii) the outcome of any legal proceedings, regulatory proceedings or
enforcement matters that have been or may be instituted against the Company and others relating to
the Merger; (iii) the occurrence of any other event, change or circumstance that could give rise to
a termination of the Merger Agreement; (iv) the fact that, if the Merger is not consummated due to
a breach of the Merger Agreement by the affiliates of Providence that are parties to the Merger
Agreement, SRAs remedy may be limited to receipt of a termination fee of $112.9 million, and if
the Merger is not consummated under certain circumstances, SRA is not entitled to receive any such
termination fee; (v) if the Merger Agreement is terminated under specified circumstances, SRA may
be required to pay an affiliate of Providence a termination fee of up to $47 million; (vi) the
diversion of managements attention from ongoing business concerns due to the announcement and
pendency of the Merger; (vii) the effect of the announcement of the Merger on the Companys
business relationships, operating results and business generally; (viii) the effect of the Merger
Agreements contractual restrictions on the conduct of the Companys business prior to the
completion of the Merger; (ix) the possible adverse effect on the price of the Companys common
stock if the Merger is not completed in a timely matter or at all; (x) the amount of the costs,
fees, expenses and charges related to the Merger; (xi) reduced spending levels and changing budget
priorities of the Companys largest customer, the United States federal government, which accounts
for more than 95% of the Companys revenue; (xii) failure to comply with complex laws and
regulations, including but not limited to the False Claims Act, the Federal Acquisition
Regulations, the Truth in Negotiations Act, the U.S. Government Cost Accounting Standards and the
Foreign Corrupt Practices Act; (xiii) possible delays or overturning of the Companys government
contract awards due to bid protests, loss of contract revenue or diminished opportunities based on
the existence of organizational conflicts of interest or failure to perform by other companies on
which the Company depends to deliver products and services; (xiv) security threats, attacks or
other disruptions on the Companys information infrastructure, and failure to comply with complex
network security and data privacy legal and contractual obligations or to protect sensitive
information; (xv) inability or failure to adequately protect the Companys proprietary information
or intellectual property rights or violation of third party intellectual property rights; (xvi)
potential for significant economic or personal liabilities resulting from failures, errors, delays
or defects associated with products, services and systems the Company supplies; (xvii) adverse
changes in federal government practices; (xviii) appropriation uncertainties; (xix) price
reductions, reduced profitability or loss of market share due to intense competition, including for
U.S. government contracts or recompetes, and commoditization of services the Company offers; (xx)
failure of the customer to fund a contract or exercise options to extend contracts, or the
Companys inability to successfully execute awarded contracts; (xxi) any adverse results of audits
and investigations conducted by the Defense Contract Audit Agency or any of the Inspectors General
for various agencies with which the Company contracts, including, without limitation, any
determination that the Companys contractor management information systems or contractor internal
control systems are deficient; (xxii) difficulties accurately estimating contract costs and
contract performance requirements; (xxiii) challenges in attracting and retaining key personnel or
high-quality employees, particularly those with security clearances; (xxiv) failure to manage acquisitions or
divestitures successfully (including identifying and valuating acquisition targets
and integrating acquired companies), losses associated with divestitures or the Companys inability
to enter into divestitures at attractive prices and on desired
timelines; (xxv) inadequate insurance coverage; and (xxvi) pending litigation and any
resulting sanctions, including but not limited to penalties, compensatory damages or suspension or
debarment from future government contracting.
Actual results may differ materially from those indicated by such forward-looking statements.
In addition, the forward-looking statements included in this report represent the Companys views
as of the date of this report. The Company anticipates that subsequent events and developments will
cause the Companys views to change. However, while the Company may elect to update these
forward-looking statements at some point in the future, the Company specifically disclaims any
obligation to do so. These forward-looking statements should not be relied upon as representing the
Companys views as of any date subsequent to the date of this report.
Important Additional Information
In connection with the Merger, SRA filed a definitive proxy statement and other relevant
documents, including a form of proxy card, with the SEC on June 15, 2011. Investors are urged to
read the proxy statement and any other documents filed with the SEC in connection with the Merger
or incorporated by reference in the proxy statement because they contain important information.
Investors can obtain these documents free of charge at the SECs web site
(
www.sec.gov
). In addition, documents filed with the SEC by SRA are available free of
charge from SRA International, Inc., c/o Investor Relations, 4350 Fair Lakes Court, Fairfax, VA
22033, or by telephone at 703.502.7731 or by email to
Investor@sra.com
.
The directors, executive officers and certain other members of management and employees of SRA
may be deemed participants in the solicitation of proxies from stockholders of SRA in favor of
the acquisition. Information regarding the persons who may, under the rules of the SEC, be
considered participants in the solicitation of the stockholders of SRA in connection with the
proposed acquisition are set forth in the proxy statement and the other relevant documents filed
with the SEC. You can find information about SRAs executive officers and directors in its Annual
Report on Form 10-K for the year ended June 30, 2010 and in its definitive proxy statement filed
with the SEC on June 15, 2011.
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