Security Firm DynCorp Plans $450 Million IPO

[Jumper]

Security Firm DynCorp Plans $450 Million IPO

By Renae Merle
Washington Post Staff Writer
Thursday, September 29, 2005; D01

DynCorp International LLC, which has built a fast-growing business providing personal security and training police forces in Iraq and Afghanistan, announced yesterday that it would go public, aiming to raise $450 million.

The planned initial public offering comes less than a year after the firm was bought by Veritas Capital Fund LP, a New York-based private equity firm, for $850 million. DynCorp will use the proceeds to repay debt, cover operating costs and pay insiders a special $100 million dividend, according to a filing with the Securities and Exchange Commission. Veritas will continue to control the company after the offering, the filing said.

Based in Irving, Tex., DynCorp for years was one of the Washington region's largest defense contractors, with a headquarters in Reston. In 2003, it was bought by Computer Sciences Corp. for $677 million. Last December, Computer Sciences sold a part of the original company to Veritas. DynCorp currently has about 1,300 employees in the Washington area.

DynCorp is the second major defense contractor this month to announce plans to go public. Science Applications International Corp., the largest privately held defense contractor, said Sept. 1 that it wanted to raise $1.7 billion in a public offering. Despite expected cuts to the Pentagon budget, defense firms have remained popular on Wall Street -- particularly those with work related to the wars in Iraq and Afghanistan.

DynCorp has specialized in training law enforcement overseas and providing personal security to dignitaries, including Afghan President Hamid Karzai. The company said in its filing that it has a proprietary database of about 3,000 "qualified civilian police personnel" who can be deployed around the world.

For fiscal year 2005, operations in Iraq and Afghanistan accounted for 36.9 percent of DynCorp's revenue. But its business in those war-torn countries also prompted a note of caution in the filing yesterday.

"Insurgents in Iraq and Afghanistan have targeted installations where we have personnel and have contributed to the instability in these countries," the filing said. "This could impair our ability to attract and deploy personnel to perform services in either or both locations."

The instability has forced the company to increase compensation to employees working in those regions, the filing said. DynCorp reported a loss of $13 million in the fiscal year ended April 2005, on revenue of $1.9 billion.

One measure of DynCorp's growth during the past four years is its security unit, International Technical Services, which reported revenue of $1.2 billion in fiscal year 2005, up from $631.7 million in the previous fiscal year. The division, which also includes drug eradication and operating military bases, accounts for 65 percent of the company's revenue and has "witnessed strong growth as a result of the U.S. government's trend toward outsourcing critical non-combat related functions," according to the filing.

Security work is generally considered a low-margin business, but DynCorp sees increasing demand fromforeign governments for that, as well as logistics and aviation services. In addition to providing security, DynCorp also offers peacekeeping support, humanitarian relief, de-mining services and aircraft and equipment maintenance.

[Ultra Swain]

I don't want to invest just on principle. But my ben and jerry stock aint what it used to be. My net worth is saying "BUY! BUY! BUY!".

[Prodigal Son]

That's pretty cool.

[Jumper]

Just imagine the share holders meetings? ha ha By the way, if you are not in Natural Gas right now, you are missing out! Winter is coming and supply has been hindered by hurricanes. ABP is one play if anyone is interested, Lynch and Kramer like it and it is at 8.00-9.00 right now.

[soulohio]

yea, i like the natural gas tip....but this whole energy game is one big fucking contrived shell game....the world has mucho reserves of the stuff and it is so precious they burn it off at the bulkhead of an oil well just so they don't have to mess with it...seems like exactly the wrong thing to do financially...anyhow if you wanna see a link on gas reserves:

http://www.naturalgas.org/overview/resources.asp

[Jumper]

The other thing I have been looking at is oil sand. Our beloved neighbors to the north are sitting on a shitload of oil in the form of oil sand. Its just they will destroy their environment up there while trying to process the stuff. It takes some hard core chemicals and a shitload of heat(natural gas!) to process. Now what would it take to blow the roof off? Try one suicide bomber with a jet, plowing into a Saudi Refinery. Or hurricanes plowing into the gulf, wait, that just happened.

[Ultra Swain]

Why are we even discussing this trifle. HALIBURTON BABY! Things keep getting worse but they keep getting richer. Either that or I would buy the company that makes Cheney's pacemaker batteries and burn it down.

[Sarge]

Well!.. my old friend and partner Harry H Frazier - VP of Operations at Dyn-Intl is not doing too bad!.. huh!.. he had told me of something impending soon!.. but thats news to me!.. my old ESOP with Dyncorp - for whom I had the pleasure of working for well over 4 years at the OLR Project in Fort Hood/Killeen Airport - is all be depleted (like the depleted uranium in Iraq!).. I have a few friends (acquaintances lets say!) who are working now for Dyncorp in Iraq, and also in S. America with the DEA.. Dyncorp is a fine company.. not as good as KBR-Halliburton - but they do take care of their people!.. and since most workers are all part owners of the company - they stand to make good also!.. Dyncorp is a major player overseas and diversification is the name of the game!.. when I started with Harry back in 1998 - after I had returned from Somalia and Rwanda; things didn't look good for many times.. contract overrun.. lack of foresight on the part of many managers/Pres/VP's.. all if not a good majority of Dyncorp are all retirees!.. the good ol boy network.. like Vinnell and others.. so if you want to get in on it.. you'd better know someone!.. I wish Harry and his company the best.. too bad I am no longer a partner!.. oh!. well!.. easy come.. easy go!.. Anyone interested.. shoot me an email and I can put in a good word for you to Harry and HR!.. Later!...