Friday, October 02, 2020
DLH Holdings Corp. (DLHC)
What Does the New Acquisition Bring?
DLH Holdings Corp is a provider of technology-enabled business process outsourcing and program management solutions in the United States. The company offers services to several government agencies which include the Department of veteran affairs, Department of health and human services, Department of Defense and other government agencies. It operates primarily through prime contracts and also derives its revenue from agencies of the federal government, primarily as a prime contractor but also as a subcontractor to other Federal prime contractors.
Joe Gomes, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Acquisition. Yesterday, DLH announced the acquisition of Irving Burton Associates (IBA) for $32 million, or $26.5 million after transaction-related tax benefits. IBA is a provider of research, systems development, and other technology-enabled solutions to the Defense Health Agency (DHA), the Telemedicine & Advanced Technology Research Center (TATRC) of the Army, and other DoD agencies. IBA will add approximately $25 million of revenue and $143 million of backlog. DLH financed the transaction through an amendment to its existing credit facility.
New Opportunities for DLH. IBA brings new opportunities to DLH, especially through its two key contracts: DHA and TATRC, both of which were renewed over the last year. DLH has minor presence in the Defense health segment at present. Management indicated there is room for growth at both the DHA and TATRC. IBA should add to DLH’s ability to deliver technology-enabled services to its federal …
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.