SAIC sets terms for $1 billion IPO

NEW YORK (MarketWatch) — SAIC Inc. said Monday it plans to offer 75 million shares at $13 to $15 each to raise about $1 billion in its initial public offering.

Self-described at the largest employee-owned research and engineering company in the U.S. with more than 43,000 employees, SAIC will join a rare class of billion-dollar-plus IPOs, including MasterCard
and Warner Chilcott

SAIC will have a total of 401 million shares outstanding when it goes public, with a market capitalization of about $5.6 billion.

SAIC, which stands for Science Applications International Corp., provides services to the U.S. Department of Homeland Security and other government agencies.

SAIC plans to trade on the New York Stock Exchange under the symbol SAI.

Morgan Stanley
and Bear Stearns
are lead underwriters of the deal.

The company plans to pay a special dividend of a combined $2 billion to its stockholders, including its directors and officers. The dividend won’t be paid on shares sold in the IPO.

For the 2005, SAIC reported revenue of $7.8 billion and net income of $927 million, compared with revenue of $7.2 billion and net income of $409 million a year earlier.

Kenneth C. Dahlberg, 61, has been chief executive officer of the company since 2003, after working at Raytheon

and General Dynamics

See also

The company traces its roots to 1969, when physicist J. Robert Beyster founded the firm after working at Los Alamos National Laboratory in the 1950s.

“Beyster was not interested in attracting those looking to ‘get rich quick’,” SAIC said on its Web site. “As the company was first set up, it was decided that the employees would own it, and that the ownership would be based on a person’s contribution to the company. As Beyster began interviewing applicants, he made a point of explaining this unique ownership arrangement.”

On Friday, SAIC shareholders approved a plan to make SAIC a wholly owned subsidiary of a newly formed company, SAIC Inc.

SAIC’s stockholders also approved the proposed a 2006 equity incentive plan and a 2006 employee stock purchase plan.

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