The McLean Group Advises Linxx Global Solutions in Leveraged ESOP Buyout

MCLEAN, VA – April 2015 – The McLean Group is pleased to announce the leveraged employee stock ownership plan (ESOP) buyout of Linxx Global Solutions, Inc. (Linxx). The buyout was led by Charlotte, NC-based private equity group Mosaic Capital Partners, LLC (Mosaic). The McLean Group’s Aerospace, Defense & Government Services (ADG) practice served as the exclusive transaction advisor to Linxx.

Virginia Beach, VA headquartered Linxx is a rapidly-growing global provider of highly-specialized training, security, information assurance, and program management services to US government customers including the Department of Defense, Department of State, Department of Homeland Security, US Navy, the Intelligence Community, NASA, and state and local agencies. Linxx employs more than 430 full- and part-time employees, most of whom hold active security clearances.

Linxx’s CEO, Martin Strong, shared, “Linxx was founded on the special operations premise that when given a focused mission statement, well led, cohesive teams always outperform. Becoming an ESOP company only empowers our Linxx team to reach for greater opportunities in the years ahead. Our founder Frank Cucci was impressed with the manner in which Mosaic educated us on the feasibility of an ESOP transaction. We value the culture we’ve built at Linxx, and it was evident that employee ownership would enhance our culture of accountability and reward the people who contribute to our success.”

He continued, “The McLean Group’s guidance was invaluable during this process. They identified an ideal buyer and transaction structure that resulted in optimal final deal terms for shareholders.”

Linxx’s ESOP highlights several emerging trends in the government services market. Private equity groups, both through platform investments and add-on acquisitions, remain extremely active in the government services market; this represents the fifth transaction closed by The McLean Group’s ADG practice in the last nine months involving a private equity sponsor. Alternative transaction structures, such as ESOPs, are becoming increasingly prevalent in the ADG market, and exit strategies can rely on a number of strategic alternatives.

Buyers prioritize candidates that possess highly specialized capabilities and customer focus. The Intelligence Community and National Security segments remain areas of heightened buyer interest, although it is increasingly important for companies to demonstrate customer access, long-standing relationships, and strong past performance even within priority market segments. Prime, full and open contracts with significant backlog drive value.