Odyssey Taking SM&A Private

Odyssey Investment Partners has agreed to acquire SM&A (Nasdaq: WINS), a –based management consulting firm for procurement projects. The deal is valued at $119.6 million, or $6.59 per SM&A share (159% premium to last Thursday’s closing price). Caltius Mezzanine is providing financing, while Wedbush Morgan Securities is advising SM&A.


SM&A (Nasdaq: WINS), the world’s foremost management consulting firm providing solutions to PURSUE, WIN and PERFORM on competitive procurement projects, and Odyssey Investment Partners, LLC, a leading middle-market private equity firm, today announced a definitive agreement under which an affiliate of Odyssey will acquire SM&A for $6.25 per share in cash in a transaction with a total value of approximately $119.6 million.


This transaction was unanimously approved by SM&A’s Board of Directors. The agreed acquisition price represents a premium of 159% over the closing price of SM&A’s common stock at close of business on October 30, 2008. Steven Myers, founder of SM&A and its largest stockholder, is supportive of the transaction.


Cathy McCarthy, president and chief executive officer of SM&A, commented, “We are pleased with the terms of this transaction; it is a win/win proposition for all involved. We believe that the best interests of our stockholders are well-served and that the Company enters an exciting new phase with a strong financial partner that can help us take SM&A to the next level of its development.”


Bill Hopkins, Managing Principal of Odyssey Investment Partners, LLC, said, “We are pleased to acquire a company of the caliber of SM&A. A best-of-breed provider in its markets, SM&A is well positioned to successfully leverage its expertise to enter new vertical markets that can offer attractive long-term growth potential in the coming years. We are pleased to add SM&A to our portfolio.”


Caltius Mezzanine has committed to provide financing for the transaction, including senior notes, senior subordinated notes and an equity co-investment.


Wedbush Morgan Securities acted as financial advisor to the Special Committee of the Board of Directors of SM&A.


The transaction, which is expected to close near the end of calendar 2008 or early in the first quarter of 2009, is subject to SM&A stockholder approval, antitrust clearance under the Hart-Scott-Rodino Antitrust Improvements Act and customary conditions.


Pursuant to the merger agreement, the Company will solicit alternative acquisition proposals from third parties for 45 days subject to compliance with specific procedures set forth in the merger agreement. The Company does not intend to disclose developments with respect to any solicitations it makes or inquiries it receives until the Board has made a decision regarding any alternative proposal and subject to compliance with the merger agreement.


About SM&A


SM&A is the world’s foremost management consulting firm providing leadership and mentoring solutions to PURSUE for business capture, WIN competitive procurements and profitably PERFORM on the projects and programs won. Our proven processes, people and tools have delivered significant top-line and bottom-line growth across markets, products and services. From the largest aerospace and defense contractors, through the major software providers, to healthcare and financial/audit service providers, SM&A is the partner many companies turn to WHEN THEY MUST WIN.


About Odyssey Investment Partners, LLC


Odyssey Investment Partners, LLC, based in New York, is a leading middle-market private equity fund with more than $1.2 billion under management. Odyssey Investment Partners, LLC makes majority, controlled investments primarily in established middle-market companies in a variety of industries, including industrial manufacturing, business, financial and healthcare services, aerospace products, and localized and route-based service businesses. For further information about Odyssey Investment Partners, LLC, please visit http://www.odysseyinvestment.com.


About Caltius Mezzanine


Based in Los Angeles, CA, Caltius Mezzanine provides innovative capital solutions in amounts of $5 to $75 million to middle-market companies throughout North America. Since its founding in 1997, Caltius Mezzanine has invested in over thirty-seven companies in a broad range of industries to support acquisitions, recapitalizations, buyouts, and organic growth. Caltius Mezzanine is currently investing out of its fourth fund, Caltius Partners IV, LP, a $500 million fund that closed in May 2008. For more information, please visit http://www.caltiusmezzanine.com.