Grove Resource Solutions, Inc., a privately held company, has been bought by DLH Holdings Corp, a top provider of solutions for federal agencies in the areas of research and development, systems engineering and integration, and digital transformation.

The firm, with around 700 people, delivers a broad array of cloud-based enterprise modernisation and cyber security solutions to several civilian and military federal institutions, most notably the National Institutes of Health (NIH), U.S. the U.S. Navy (USN), and among others, the USMC (Marine Corps).

Zach Parker, president and chief executive officer of DLH, said, "We are excited to start a new chapter at DLH with the acquisition of GRSi. "With this historic deal, we strengthen our engineering and information technology capabilities and get the scale we need to compete successfully in the market. We anticipate that our consolidated organisation will build on GRSi's achievements to propel rapid growth for DLH in the short- and long-terms. GRSi provides high-end IT and technical capabilities to scientists, researchers, and system engineers. The highly qualified personnel at GRSi includes some of the most talented technological professionals in our sector. We are thrilled to officially welcome the complete crew to the DLH family.

GRSi was bought for $185.0 million, or $157.9 million once transaction-related tax savings were deducted, which, calculated on a net present value basis, are worth about $27.1 million. $178.0 million in cash and $7.0 million in stock are included in the purchase price. According to DLH, GRSi will eventually bring in an estimated $140 million in annum revenue for the Company, while the company's backlog was over $550 million at close. Current GRSi key operational leaders are anticipated to remain with DLH Holdings Corp. in leadership positions as GRSi becomes a wholly owned subsidiary of that company.

Working with Zach and his team has confirmed our belief that this transaction will result in an impressive platform for achieving our joint objectives for years to come. "We believe that DLH is an ideal partner for GRSi. From culture and values, to market presence and capabilities, we believe that DLH is an ideal partner for GRSi," continued David Affeldt, President & CEO of GRSi.

The acquisition was paid for by DLH through a modification to its current secured credit arrangement. First National Bank of Pennsylvania served as agent and joint lead arrangers alongside F.N.B. Capital Markets, M&T Bank, and Atlantic Union Bank. The credit line was made up of a $70 million revolving credit line and a $190 million syndicated term loan. The Company will make additional terms of the transaction and financing arrangements public in its SEC filings.