Davis Polk advised the joint lead arrangers and joint bookrunners, the administrative agent, and the collateral agent, in connection with the $3.1 billion senior secured credit facilities provided to Perspecta Inc. consisting of (i) a five-year senior secured revolving credit facility with initial borrowing capacity of $600 million, of which $550 million is available and undrawn after giving effect to the spin-off and the merger described below to provide support for Perspecta’s business, including ongoing liquidity, (ii) a three-year senior secured tranche A1 term loan facility in an aggregate principal amount of $350 million, (iii) a five-year senior secured tranche A2 term loan facility in an aggregate principal amount of $1.65 billion and (iv) a seven-year senior secured term loan B facility in an aggregate principal amount of $500 million.

The facilities were established in connection with DXC Technology Company’s spin-off of Perspecta and the subsequent mergers of (i) Ultra KMS Inc. with and into KGS Holding Corp., with KGS Holding Corp. as the surviving entity, (ii) Ultra First VMS Inc. with and into Vencore Holding Corp., with Vencore Holding Corp. as the surviving entity and (iii) Vencore Holding Corp. with and into Ultra Second VMS LLC, with Ultra Second VMS LLC as the surviving entity. As a result of the mergers, KGS Holding Corp. and Ultra Second VMS LLC are now direct wholly owned subsidiaries of Perspecta.

All of the proceeds of the loans funded under the tranche A1 facility and a portion of the proceeds of the loans funded under the tranche A2 facility were used by Perspecta to finance a distribution of approximately $984 million in cash to DXC Technology Company and to pay transaction costs. Additionally, $50 million of the revolving credit facility, the remainder of the loans funded under the tranche A2 facility and all of the loans funded under the term loan B facility were funded in an additional aggregate amount of $1.45 billion, the proceeds of which were used to fund the cash portion of the merger consideration to stockholders of Vencore Holding Corp., to repay, refinance and/or redeem substantially all of Vencore Holding Corp.’s and KGS Holding Corp.’s existing indebtedness, to pay for additional transaction costs, and for general corporate purposes.

Perspecta, with 14,000 employees and a value of $4.2 billion, serves U.S. government customers in defense, intelligence, civilian, health care, and state and local markets. Perspecta works closely with health care organizations to enhance patient care, lower costs and increase efficiencies. In the intelligence space Perspecta provides the data and systems expertise, mission focus and enterprise awareness that intelligence agencies need to protect the U.S. from terrorism, proliferation, chemical and biological warfare, cybersecurity threats and foreign counterintelligence activities. Perspecta also partners with state and local governments in more than 30 states to identify and deliver the right infrastructure, business solutions and digital transformation services that help achieve policy objectives and enable integrated citizen-centric services.

The Davis Polk finance team included partners Lawrence E. Wieman and associates Vanessa L. Jackson and Madeleine Vella. Partner Po Sit and associate Gil Savir provided tax advice. Counsel Will Schisa provided regulatory advice. Counsel Lawrence R. Plotkin provided real estate advice. Associate Christopher C. Woller provided intellectual property and technology advice. Counsel David A. Zilberberg provided environmental advice. Counsel Ann Becchina provided executive compensation advice. Members of the Davis Polk team are based in the New York and Washington DC offices.

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