PE Cleans Up Deals in Commercial Services

Providence Equity Partners has agreed to take SRA International (NYSE: SRX) private in a $1.88 billion deal. The firm will pay SRA shareholders $31.25 in cash per share of common stock. BofA Merrill Lynch and Citigroup Global Markets are providing debt financing in support of the transaction. SRA provides technology and strategic consulting services and solutions to government organizations and commercial clients.

Since the beginning of 2009, PE investors have invested in 472 companies primarily engaged in the Commercial Services industry, according to the PitchBook Platform. Deal activity in the industry experienced a boost in 2010 with 238 completed deals, up from 186 in 2009. With 53 deals completed during the first quarter of 2011, the pace of completed deals this year is lagging slightly behind 2010's, but it's still faster than 2009's. This year investors appear to be showing more interest in the Environmental Services sector of the Commercial Services industry. While the sector accounted for only 7% of the industry's deal activity in 2010, it has been responsible for 17% of the industry's completed deals so far this year. Media & Information Services is also proving to be a hot sector, accounting for 26% of the deals completed in the industry during 1Q 2011, up 5 percentage points from its share of 2010 deal activity.