MAXIMUS completes $400M acquisition of GDIT citizen engagement centers, expects between $600 – $625M in 2019 revenue

“On November 16, 2018, MAXIMUS completed the $400 million, all-cash acquisition, subject to working capital adjustments, of selected U.S. Federal civilian citizen engagement centers from General Dynamics Information Technology. The assets will be reported in the Company’s U.S. Federal Services Segment. MAXIMUS will file a Form 8-K in December with the financial statements of the acquired assets and pro forma financial information. The Company expects that fiscal 2019 revenue from the acquisition will range between $600 million and $625 million and estimates that it will contribute approximately $0.45 of diluted earnings per share.

MAXIMUS is establishing fiscal 2019 GAAP guidance which includes the acquisition. The Company expects fiscal 2019 revenue to range between $2.925 billion and $3.0 billion. Approximately 93% of the Company’s fiscal 2019 forecasted revenue is in the form of backlog, option periods or extensions. This calculation includes $612.5 million of revenue and backlog from the acquisition. For fiscal 2019, the Company expects GAAP diluted earnings per share to range between $3.55 and $3.75. For fiscal 2019, the Company expects cash flows from operations to range between $275 million and $325 million, and free cash flow to range between $235 million and $285 million.

For fiscal 2019, the Company has estimated its effective income tax rate will range between 25% and 26% and weighted average shares outstanding of approximately 65.3 million.

Bruce Caswell, President and Chief Executive Officer of MAXIMUS, commented, “During fiscal 2018, we made demonstrated progress in executing our strategic initiatives, including assessing and prioritizing new and adjacent markets, stepping-up our M&A activities with our recent acquisition, deepening our executive bench, and bringing in new sales and capture leadership. Our vision is to be the premier provider of large-scale complex program management solutions, offering unparalleled support to citizens who access and utilize critical government programs. We continue to see evidence that long-term macro trends remain in our favor.” Read the full press release here.

Source: MAXIMUS Reports Fourth Quarter and Full Year Results for Fiscal Year 2018 – November 20, 2019. MAXIMUS

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