Science Applications International Corp (SAIC) has closed its merger with US Government services contractor Engility Holdings in a $2.5bn all-stock transaction.

The completion of the merger agreement follows approval from stockholders of both companies on 11 January.

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Engility stockholders have received a fixed exchange ratio of 0.450 shares of SAIC common stock for each share of Engility stock.

The transaction is valued at $40.44 per share of Engility common stock and SAIC will assume the repayment of $900m in Engility’s debt.

Engility has expertise in providing next-generation systems engineering and integration services, especially to space, federal, and intelligence customers.

Moraco said: “With the acquisition of Engility, we are now a team of 23,000, driven by mission, united by purpose and inspired by opportunity.

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“The enlarged SAIC will create the second largest independent technology integrator in government services with $6.5bn of pro-forma last 12 months’ revenue.”

“Add to that five consecutive quarters of organic revenue growth for SAIC and the trend is clear, we’re thriving. We are now a bigger, stronger company executing our long-term strategic plan, dedicated to exceeding customer expectations and driving shareholder value.”

Under the deal, the acquired company has become a wholly owned subsidiary of SAIC, whose shareholders will own approximately 72% of the combined company.

The merged entity retains the SAIC name and will remain headquartered in Reston, Virginia, US, with Tony Moraco as CEO.

The enlarged SAIC will create the second largest independent technology integrator in government services with $6.5bn of pro-forma last 12 months’ revenue.

Citigroup Global Markets served as lead financial advisor and Morrison & Foerster as legal counsel while Renaissance Strategic Advisors offered business due diligence and strategy support services.

Engility received legal counsel from Weil, Gotshal, & Manges, as well as Bass, Berry and Sims. Guggenheim Securities acted as lead financial advisor and Morgan Stanley & Co provided financial advisory services.