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Madison Dearborn Partners and CoVant Agree to Purchase LGS Innovations from Alcatel-Lucent
20 December 2013

Madison Dearborn Partners and CoVant announced today that they have agreed to buy LGS Innovations LLC, a leading provider of groundbreaking research and advanced networking and communications solutions to the U.S. federal government, from Alcatel-Lucent. Closure of the transaction is anticipated to take place in the first quarter of 2014, following the completion of regulatory approvals and consultations with the U.S. Government.

LGS Innovations was formed during the Alcatel and Lucent merger in 2006 as an independent subsidiary and sole channel to the U.S. Federal Government in response to Committee on Foreign Investment in the United States (CFIUS) requirements. With a heritage extending back over 60 years, LGS Innovations supports its customers with secure communications and networking solutions as well as advanced research and development in photonics, remote sensing, microtechnology and cybersecurity.

“This transaction will better enable us to serve our customers in the civilian, defense, and advanced programs communities by doing what we do best – researching, developing, and deploying secure networking and communications solutions,” said Kevin Kelly, CEO, LGS Innovations. “We are also excited that with new ownership comes an opportunity to apply our cutting-edge research to a new set of challenges.”

LGS Innovations employs nearly 700 people and is headquartered in Herndon, Virginia, with major facilities in Florham Park, New Jersey, Westminster, Colorado, High Point, North Carolina, and Lisle, Illinois. All employees, management, and business structures will transition to the new ownership team at closing to ensure seamless continuity with customers and other stakeholders.

The sale to a U.S.-based company owned by the Madison Dearborn/CoVant investor group will allow LGS Innovations to address markets and customers that previously were difficult to pursue under the company’s and its current parent’s security agreements with the U.S. Government. In addition, LGS Innovations will now be able to take Alcatel-Lucent’s products and services to a broader market to include the U.S. state and local government markets, the public safety and first responder community, foreign governments, and commercial enterprises.

Madison Dearborn, based in Chicago, is a leading private equity firm that invests across a broad spectrum of industries, including business and government services, while CoVant is a holding company focused on acquiring and growing companies in the federal technology solutions marketplace. CoVant, based in McLean, Virginia, was created by former executives of Anteon International, a private-equity backed government technology services company that was sold to General Dynamics Corp. in 2006 for $2.2 billion.

“LGS Innovations is a highly attractive business and we’re pleased to have the opportunity to enable the company to realize its full potential,” said Doug Grissom, a Managing Director at Madison Dearborn and the head of the firm’s Business and Government Services team. “Integral to our success will be LGS Innovations’s unmatched R&D capabilities, meaningful intellectual property and differentiated offering. We look forward to partnering with the management team and CoVant to support and advance these elements of the business to the benefit of LGS Innovations’s customers and employees.”

“With its impressive track record and some of the brightest minds in our industry, LGS Innovations is competitively positioned,” said Joseph Kampf, CEO of CoVant, and the former CEO of Anteon International and current board director of A-T Solutions. “We are excited to support the leadership team and employees with our experience and expertise in the Federal Government market.”

LGS Innovations will remain the exclusive reseller of Alcatel-Lucent products and services to the U.S. Federal Government. The company will also have exclusivity in sales to the integration and reseller community where the end customer is the Federal Government.

About LGS Innovations

LGS Innovations™ LLC solves the most complex networking and communications challenges facing the U.S. Federal Government. LGS Innovations delivers groundbreaking research and advanced networking and communications solutions that provide an information advantage and contribute to the mission success of its customers. Solutions include Infrastructure & Installation; Video Teleconferencing and IPTV Solutions; Public Safety and Emergency Communications, Tactical Communications; Wireless/Mobility; 4G/LTE; Cloud Solutions; Enterprise, Optical and Data Networking; Network Integration; and Research and Development in Advanced Multimedia/RF, Cybersecurity, sensing technologies, and Photonics.

LGS Innovations is headquartered in Herndon, Virginia, with offices in Colorado, Illinois, Maryland, New Jersey, and North Carolina. To learn more about LGS Innovations, visit http://www.lgsinnovations.com, read the latest posts on the LGS Innovations blog at http://www.lgsinnovations.com/blog, and follow the Company on Twitter: https://twitter.com/lgsinnovations. LGS Innovations: The Network Experts™.

About Madison Dearborn Partners

Madison Dearborn Partners, based in Chicago, is a leading private equity investment firm in the United States. Since Madison Dearborn’s formation in 1992, the firm has raised six funds with aggregate capital of over $18 billion and has completed approximately 125 investments. Madison Dearborn invests in businesses across a broad spectrum of industries, including business and government services; basic industries; consumer; financial and transaction services; health care; and telecom, media and technology services. Its noteworthy investments include Asurion, CDW, Fieldglass, MetroPCS, Nuveen Investments, TransUnion, and Yankee Candle. For more information, please visit www.mdcp.com.

About CoVant

Founded by former executives of Anteon International, CoVant invests in and provides strategic, financial and operational resources to a portfolio of companies specializing in technology and related solutions that serve the needs of government customers. With an experienced team of business executives and a respected board of former government and military leaders, CoVant delivers a unique and highly strategic approach to maximizing company growth and value. Visit www.covant.com for more information.

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Alcatel-Lucent agrees to sell LGS Innovations LLC, its US Federal Government-serving subsidiary, to Madison Dearborn Partners and CoVant

Transaction contributes to Alcatel-Lucent’s Shift Plan commitment to selling selective assets

Paris, France/Chicago, Illinois, December 20, 2013 – Alcatel-Lucent (Euronext Paris and NYSE: ALU) announced today that it has signed a definitive agreement for the sale of its subsidiary, LGS Innovations LLC, to a US-based company owned by a Madison Dearborn Partners-led investor group that includes CoVant.

The divestment forms part of the commitments outlined by Alcatel-Lucent in The Shift Plan. Announced in June the plan set out the strategy to reposition the company as a specialist in IP Networking and Ultra-Broadband Access, while reducing its fixed cost structure by Euro 1 billion and making selective asset sales to generate at least Euro 1 billion by the end of 2015.

The cash transaction agreed between Alcatel-Lucent and the Madison Dearborn/CoVant group will comprise a total amount of up to USD$ 200 million, of which 50 per cent will be paid at closing, and up to 50 per cent in a subsequent variable component to be determined on the divested company’s results of operations for the 2014 fiscal year. Closing of the transaction is subject to certain conditions, including US Government approvals, and is targeted to occur in the first quarter of 2014.

Michel Combes, CEO of Alcatel-Lucent, said: “We have, under The Shift Plan, made a firm commitment to divesting assets as and when the right opportunity arises for Alcatel-Lucent, and for the assets themselves. Today’s agreement with Madison Dearborn and CoVant represents the right opportunity for Alcatel-Lucent and LGS Innovations. We wish the LGS team well as they start a new chapter in their long and trusted service to the US Federal Government.”

LGS Innovations provides secure networking, satellite communications, VoIP, optical routers and other solutions for the US national security, defense, and advanced research communities, and has a heritage as a trusted partner of the US Federal Government extending back over 60 years.

Madison Dearborn is a leading private equity firm that invests across a broad spectrum of industries, including business and government services, while CoVant is a holding company focused on acquiring and growing companies in the federal technology solutions marketplace.

“LGS Innovations is a highly attractive business and we’re pleased to have the opportunity to evolve the company,” commented Doug Grissom, a managing director at Madison Dearborn and head of the firm’s Business and Government Services team. “We look forward to partnering with the management team and CoVant to the benefit of LGS Innovations LLC’s customers and employees.”

Joseph Kampf, CEO of CoVant, and the former CEO of Anteon International and current board director of A-T Solutions said: “We plan to capitalize on LGS Innovations’ competitive positioning and work to expand its presence within the US Government and drive its revenue by broadening its customer base, products, and solutions.”

ABOUT MADISON DEARBORN PARTNERS

Madison Dearborn Partners, based in Chicago, is a leading private equity investment firm in the United States. Since Madison Dearborn’s formation in 1992, the firm has raised six funds with aggregate capital of over $18 billion and has completed approximately 125 investments.  Madison Dearborn invests in businesses across a broad spectrum of industries, including business and government services; basic industries; consumer; financial and transaction services; health care; and telecom, media and technology services.  Its noteworthy investments include Aderant, Asurion, Cbeyond, Fieldglass, Intelsat, NextG Networks, QuickPlay Media, @stake, and Stericycle.  For more information, please visit www.mdcp.com.

ABOUT COVANT

Founded by former executives of Anteon International, CoVant focuses on acquiring and growing companies in the federal technology solutions marketplace.  With an experienced team of business executives and a respected board of former government and military leaders, CoVant delivers a unique and highly strategic approach to maximizing company growth and value.  Visit www.covant.com for more information.

PRESS CONTACT FOR MADISON DEARBORN PARTNERS AND COVANT

CHUCK DOHRENWEND, ABERNATHY MacGREGOR, cod@abmac.com, +1 212 371 5999

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