KKR, General Atlantic Buying TASC for $1.65 Billion

NEW YORK, Nov 8 (Reuters) – Defense contractor Northrop Grumman (NOC.N) has agreed to sell its TASC consulting unit to two buyout firms, General Atlantic and Kohlberg Kravis Roberts & Co., for $1.65 billion, the companies said on Sunday.

The deal is the latest in a spate of buyouts, as the financing markets improve. On Thursday, the biggest leveraged buyout of the year was signed, when private equity firm TPG and the Canada Pension Plan struck a $4 billion deal to buy IMS Health Inc (RX.N).

Northrop hired investment banks to sell the unit, which advises government military agencies, a few months ago, drawing interest from a number of private equity firms.

Sources told Reuters in September that a sale, originally expected to fetch about $2 billion, would more likely be around $1.5 billion.

The deal is expected to be completed in the fourth quarter.

Financing commitments for the acquisition are comprised of senior secured credit facilities and senior subordinated notes, the companies said in a press release.

The credit facilities will be provided by Barclays Capital, Deutsche Bank (DBKGn.DE), RBC Capital Markets and CPPIB Credit Investments.

KKR’s Capital Markets unit arranged the senior subordinated notes with Highbridge Mezzanine Partners as the lead investor.

Barclays Capital, Deutsche Bank and RBC Capital Markets advised General Atlantic and KKR.

By Megan Davies