Michael Baker Corporation announced that it has entered into a definitive merger agreement to be acquired by Integrated Mission Solutions, an affiliate of DC Capital Partners.

Under the terms of the agreement, which has been unanimously approved by Baker’s board of directors, Baker shareholders will receive $40.50 in cash for each share of common stock that they own, in a transaction valued at $396.9 million. The per share price represents a 37% premium to Baker’s closing share price of $29.60 on July 26, 2013, a 55% premium to the average 90-day share price, and a 93% premium to the share price on December 18, 2012, the day before DC Capital publicly proposed to acquire Baker.

The transaction will be financed through a combination of cash provided by IMS as well as debt financing that has been committed, subject to the terms of a commitment letter, by Jefferies Finance, which is also serving as exclusive financial advisor to IMS and DC Capital. Arnold & Porter is serving as legal advisor to IMS and DC Capital. Houlihan Lokey is serving as financial advisors to Baker in this transaction. Jones Day and K&L Gates are serving as legal advisors to Baker.

Under the terms of the agreement, a subsidiary of IMS will commence a tender offer to acquire all of the outstanding Baker common shares. Baker’s board of directors unanimously approved the offer. Any shares not tendered in the offer will be acquired in a merger at the same cash price as paid in the tender offer. Closing of the tender offer is conditioned upon customary closing conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. The transaction is expected to close late in the third quarter or early in the fourth quarter of 2013.

In an effort to preserve Baker’s heritage and culture, IMS has agreed to retain the Baker name, maintain Baker’s presence in the Pittsburgh area, and keep the current organization and staff of Baker essentially intact.

To read the full news release click here.