DLH Strengthens Information Technology and Cyber

ATLANTA, Dec. 8, 2022 (GLOBE NEWSWIRE) — DLH Holdings Corp. (NASDAQ: DLHC) (“DLH” or the “Company”), A leading provider of research and development, systems engineering and integration and digital transformation solutions for federal agencies, announced today that it has privately acquired Grove Resource Solutions, Inc. (“GRSi”) of Bethesda, Maryland.

The company, with approximately 700 employees, provides a wide range of cloud-based enterprise modernization and cybersecurity solutions to numerous civilian and military federal agencies, most notably the National Institutes of Health (NIH), the US Navy (USN) and the US Navy. Corps (USMC), among others.

“We are excited to begin a new era at DLH with the acquisition of GRSi,” said Zach Parker, President and CEO of DLH. “Through this significant transaction, we are elevating our information technology and engineering capabilities, while adding the scale we need to thrive in a more competitive market and more. GRSi’s prestigious IT and technical capabilities serving scientists, researchers and systems engineers have earned the company a reputation for excellence, and we expect our combined organization to build on these achievements to drive accelerated growth for DLH in the near and long term. Conditions. GRSi’s highly credentialed workforce includes some of the best and brightest technology leaders in our industry. We couldn’t be more excited to welcome the entire team to the DLH family.”

GRSi was acquired for $185.0 million, or $157.9 million less tax benefits related to the transaction at a value of approximately $27.1 million on a net present value basis. The purchase price includes $178.0 million in cash and $7.0 million in equity. DLH estimates that GRSi will contribute to the company annual revenues of approximately $140 million in the future, and the company’s backlog was approximately $550 million at closing. GRSi will be a wholly owned subsidiary of DLH Holdings Corp., and GRSi’s current principal operating leaders are expected to remain with DLH in leadership roles.

“From culture and values ​​to market presence and capabilities, we believe DLH is an ideal partner for GRSi,” added David Apfeld, President and CEO of GRSi. “Working with Zach and his team has strengthened our belief that this transaction will yield returns. An impressive platform for achieving our common goals for the years to come. DLH has the capabilities, customers and culture to enhance ours – resulting in a dynamic and improved provider of essential services to federal clients.”

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DLH financed the acquisition through an amendment to its existing secured credit facility. First National Bank of Pennsylvania acted as agent, and FNB Capital Markets, M&T Bank, and Atlantic Union Bank acted as joint lead arrangers. The credit facility consisted of a syndicated loan for a period of 190 million dollars and a revolving credit facility of 70 million dollars. Additional terms of the transaction and financing arrangements will be available in the company’s SEC filings.

Conference call and webcast

DLH will host a conference call and webcast for investors and analysts at 10:00 a.m. ET on December 13, 2022 during which members of senior management will review a presentation (already posted on the Company’s website) focusing on the GRSi transaction. A question and answer session will follow. Those interested can listen to the conference call via webcast or by dialing 888-347-5290 or 412-317-5256. A digital recording will be available for replay two hours after the call is completed and can be accessed on DLH’s Investor Relations website or by dialing 877-344-7529 and entering conference ID 5841865.

consultants

KippsDeSanto & Co. served as financial advisor to DLH. Holland & Knight, LLP and Becker & Poliakoff LLP served as legal advisors to DLH as part of this transaction. Baker Tilly, Lockton Companies and Wolf Den Associates provided advisory services to DLH in connection with the acquisition. Baird served as GRSi’s financial advisor.

on DLH

DLH (NASDAQ:DLHC) provides enhanced health and readiness solutions for federal programs through research and development, systems engineering and integration, and digital transformation. The company’s experts in public health, performance evaluation and health operations solve the complex problems facing both civilian and military clients, leveraging digital transformation, artificial intelligence, advanced analytics, cloud-based applications, telephony health systems and more. With over 2,500 employees dedicated to the idea that “your mission is our passion”, DLH brings a unique combination of government sector experience, proven methodology and an unwavering commitment to public health to improve the lives of millions. For more information, visit www.DLHcorp.com.

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on GRSi

GRSi is a federal service provider specializing in technology, business solutions and research and engineering. For nearly 20 years, GRSi has been providing innovative service solutions to meet the nation’s most pressing challenges. GRSi, selected as the Maryland Technology Council’s 2021 Government Contracting Company of the Year, is an industry-leading professional technical and engineering services firm that provides systems engineering, cybersecurity, technology integration, and enterprise operations management based on next-generation practices to the federal, defense organization. , intelligence and commercial customers worldwide. For more information at www.grsi.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995:

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or the future financial performance of DLH. Any statements relating to expectations, forecasts or other characterizations of future events or circumstances or that are not statements of historical fact (including, without limitation, statements that the Company or its management “believe”, “anticipate”, “anticipate”, “plan”, “intend” and similar expressions) should be considered forward-looking statements that involve risks and uncertainties that could cause actual events or actual results of DLH to differ materially from those indicated in the forward-looking statements. Forward-looking statements in this release include, among other things, statements regarding estimates of future revenues. These statements reflect our belief and assumptions about future events that may prove to be accurate. Our actual results may differ materially from such forward-looking statements made in this release due to a variety of factors, including: the outbreak of the novel coronavirus (“COVID-19”), including measures to reduce its spread and impact on the economy and demand for our services, are uncertain, cannot be unforeseeable, and other risks and uncertainties may worsen or worsen; the risk that we will not realize the anticipated benefits of the GRSi acquisition; (including performance and expected future financial operating results); diverting management’s attention from the normal day-to-day operations of the business and the challenges of managing larger and more extensive operations arising from the acquisition; the inability to retain GRSi employees and customers; Awarding contracts in connection with repeated competition for existing businesses and/or competition for new businesses; the risks and uncertainties related to the customer’s interest in new services and purchases of new services; compliance with financial and other standards of the banks; changes in the client’s budgetary priorities; Government contract procurement (such as bid and award protests, small business disruption, job loss due to organizational conflicts of interest, etc.) and termination risks; the ability to successfully integrate GRSi’s operations and any future acquisitions; the impact of inflation and higher interest rates; and other risks described in our SEC filings. For a discussion of such risks and uncertainties that could cause actual results to differ from those contained in forward-looking statements, see “Risk Factors” in the Company’s periodic reports filed with the SEC, including our Annual Report on Form 10-K for the fiscal year ended September 30, 2022 , as well as the subsequent reports submitted thereafter. The forward-looking statements contained herein are not historical facts, but are based on current expectations, estimates, assumptions and projections about our industry and business.

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Such forward-looking statements are made as of the date hereof and may be out of date over time. The company bears no responsibility for updating forward-looking statements, except as required by law.

Contacts:

media

Email: [email protected]

Investor Relations

Phone: 646-438-9385

Email: [email protected]

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