PAE Incorporated (PAE) stock soared in the premarket: Why is it so?

PAE Incorporated (PAE) stock soared in the premarket following the announcement of the acquisition agreement with Amentum Government Services Holdings LLC. PAE stock price saw a surge of 68.64% to reach $9.95 a share at the time of this writing. The stock was also performing well in the previous trade as it went up by 0.17% at closing. Let’s dig in to explore more about this stock.

PAE Incorporated provides outsourced services and operational solutions to the government of the United States as well as other allied governments, international companies, and organizations. The company is mainly operating through two segments: National Security Solutions and Global Mission Services. PAE stock having a market cap of $549.11 million was founded in 1955 and its headquarters are in Falls Church, Virginia.

What’s Happening?

According to the definitive agreement of PAE stock with Amentum Government Services Holdings LLC, the former will be acquired by the latter for approximately $1.9 billion in an all-cash transaction. The assumption of debt and certain fees is also included in the transaction.

The terms under the merger agreement state that PAE shareholders will receive $10.05 per share in cash upon the consummation of the transaction. This represents a premium of 70% to the PAE stock closing price on October 22, 2021. The transaction is subject to the shareholders’ approval and customary closing conditions.

Amentum is a premier global technical and engineering services partner that supports critical programs related to security, intelligence, defense, energy, and the environment.

Previous Event of PAE stock:

On September 20, 2021, PAE announced that it had been provided the $98 million Logistic Support contract by the Naval Air Warfare Center Aircraft Division. The duration of this contract is 18 months during which PAE will provide support for F-5 fighter aircraft. All the maintenance and logistic support services for the 43 F-5F and F-5N aircraft will be handled by the PAE stock. This contract will ensure the continuation of longstanding relations of PAE Incorporated with the U.S Navy.


Investors are responding positively to the recent agreement between PAE stock and Amentum as they are optimistic regarding future outcomes. The management is confident that its skilled workforce is capable enough to deliver the desired solutions under the new contract. The per-share price performance in 2021 is not satisfactory as this stock has lost almost 35% year-to-date. Hence investors need to know the nitty-gritty of this stock before making any decision.