Staffing and outsourcing healthcare logistics and services provider DLH Holdings Corp. (NASDAQ: DLHC) has acquired privately held Danya International for $38.75 million, consisting of $36.25 million in cash and $2.5 million in restricted common stock.

DLHC shares rallied more than 10% to $4.40 within hours after the announcement, giving DLH Holdings a market value of nearly $43 million. DLH expects the deal to be immediately accretive to earnings and cash flow.

Danya is a privately held company founded in 1996 by Dr. Jeff Hoffman and is headquartered in Silver Spring, Maryland. The company has been a leader in providing evidence-based health and education technology-enabled solutions to communities across the globe. Danya has won more than 150 contracts and grants. Its customer list includes several federal health agencies.

Dr. Hoffman received a Ph.D. in Clinical Psychology from the University of North Carolina at Chapel Hill, an M.A. in Family Studies and Child Development from Stanford University, and a B.A. in Liberal Arts from Michigan State University.

Dr. Hoffman has been the principal investigator on several federally funded research projects and has authored or co-authored more than 30 research and clinical articles and treatment manuals. He was the principal author for the comprehensive substance abuse treatment and relapse prevention program titled Living in Balance: Moving From a Life of Addiction to a Life of Recovery, and co-developer of the Adolescent Smoking Cessation Escaping Nicotine and Tobacco (ASCENT) program. Hazelden Publishing and Educational Services published both products.

Dr. Hoffman initiated the opening of Danya’s East Africa office in Nairobi, Kenya, and led the public-private partnership pilot study, called Mobile Direct Observation Treatment, using mobile video phones to monitor tuberculosis medication compliance. Dr. Hoffman also serves as Chairman of the Board of the not-for-profit Danya Institute; and as Board Member of Save A Child’s Heart, which performs pediatric heart surgeries in Israel for children from Palestine and developing countries in Africa and elsewhere.

Danya provides technology-enabled program management, public health expertise, consulting, and digital communications solutions primarily supporting federal health and education programs. The company currently employs approximately 150 full-time employees.

“We view the addition of Danya as transformative for DLH as it significantly enhances our capabilities and enables us to achieve multiple objectives of our growth plan,” said DLH president & CEO, Zachary Parker. “The combination of these two companies creates a nationally recognized provider of technology-enabled solutions to the Federal Government.”

“DLH is the ideal partner to continue to support and enhance Danya’s customers and capabilities, as well as the strategy and vision that I have spent the past 20 years developing and nurturing. The shared values and aligned interests of our organizations make this combination beneficial for our customers and employees,” said Dr. Jeff Hoffman, Danya’s CEO and principal shareholder, who will serve as an advisor to DLH for up to two years.

DLH has entered into a new loan agreement with Fifth Third Bank providing for a $25 million term loan and $10 million revolving line of credit, of which $5 million are drawn as of the closing.

Affiliates of Wynnefield Capital, the largest shareholder of DLH, have provided $2.5 million in a subordinated bridge loan. DLH will also use a portion of its existing cash balance to finance the remainder of the purchase price and transaction related expenses.

Canaccord Genuity served as financial advisor to DLH. Holland & Knight LLP and Becker & Poliakoff LLP provided legal advisory services to DLH. Baker Tilly provided due diligence support to DLH.

KippsDeSanto & Co. served as financial advisor to Danya. Greenberg Traurig provided legal advisory services to Danya.

DLH serves clients throughout the U.S. as a healthcare services and contingency/staff augmentation services provider to the Federal Government in health and medical logistics. DLH has over 1,250 employees throughout the country. The company was formerly known as TeamStaff, Inc. and changed its name to DLH Holdings Corp. in June 2012. The company was founded in 1969 and is headquartered in Atlanta, Georgia.

Photo: Jeffrey A. Hoffman, Ph.D., CEO of Danya International, Moderator of the 2013 EGI Ethiopia Public Health Forum.



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