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January 18, 2011

Xe Services, LLC (Formerly Blackwater) Sold to USTC Holdings, LLC

At least when Blackwater was owned by Erik Prince, there was a face to go with the money. Now there are only unnamed partners in equity firms that are part of a consortium. One article announced: "The company going forward will be managed by a board appointed by the equity owners which will include independent, unaffiliated directors. The New York Times reported Friday the sale came after the State Department threatened to stop awarding contracts to the company as long as it was owned by Prince, a former Navy SEAL." The man who will be managing the company, however, is a long-time friend and business associate of Prince in the former Blackwater.

Companies mentioned in this article: USTC Holdings, LLC

Blackwater (Xe)
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NEW YORK -- (BUSINESS WIRE) -- USTC Holdings, LLC, an investor consortium led by private equity firms Forté Capital Advisors (“Forté”) and Manhattan Partners (“Manhattan”), announced today that it has acquired Xe Services, LLC (“Xe” or the “Company”) and its core operating subsidiaries. Xe is a leading provider of training and technical services focused on worldwide diplomatic security operations. The terms of the agreement were not disclosed.

As part of the transaction, USTC Holdings, LLC will acquire the Xe companies that provide domestic and international training, as well as security services. This will include the Company’s state-of-the-art training facility in Moyock, N.C., which is widely regarded as the preeminent training facility in the world and is unmatched in the quality and scope of the training services provided. Over 50,000 U.S. government personnel have been trained at the facility as well as numerous allied forces.

Jason DeYonker, Managing Partner of Forté, said, “Xe provides indispensible training and expertise to government and commercial entities around the world. I have a deep appreciation and respect for the quality of Xe’s employees and the valuable services they provide our country. We look forward to partnering with management to realize our collective vision for Xe’s future.” 

DeYonker has unique experience with the Company that dates back to its founding in the late 1990s. He advised the Company through development of its early business plan and expansion of the Moyock training facility, as well as supporting negotiations of its first training contracts with U.S. government agencies. Between 1998 and 2002, longs to those companies with the highest standards of governance, transparency, and performance. Our vision for Xe is to set the bar against which all other companies in our industry are measured.” 
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Dean Bosacki, Managing Partner of Manhattan, said, “Xe is an absolutely unique asset, and is recognized as ‘best in class’ by many of the Company’s elite customers. We are excited to complement the Company’s management team who are committed to professionalism and ethical conduct wherever the Company operates.”

This change of ownership does not affect the previously announced Consent Agreement between Xe and the U.S. Department of State's Directorate of Defense Trade Controls. As part of the agreement, Wendy Wysong, a partner at Clifford Chance LLP, will continue to serve as Special Compliance Officer for the Company and will oversee the export compliance program at Xe.

Bingham McCutchen acted as legal counsel to USTC Holdings and the Chertoff Group in collaboration with Avascent Group performed strategic due diligence on USTC Holdings’ behalf.

Financing for the transaction was led by Bank of America Merrill Lynch.

Copyright © Business Wire 2011

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