Amentum on Monday said it has agreed to acquire PAE Inc. [PAE] for $1.9 billion in a deal that would create a more than $9 billion government services contractor with capabilities ranging from aviation logistics and modernization to cybersecurity and intelligence technologies and services.

The acquisition is subject to approvals by PAE’s shareholders and regulators and is expected to close by the end of the first quarter of 2022.

Amentum had about $6.4 billion in sales in its fiscal year 2020, which includes some revenue from its November 2020 acquisition of DynCorp International. PAE had $2.7 billion in sales in 2020 and is forecasting between $3.1 billion and $3.2 billion for 2021.

Amentum said the pending acquisition will strengthen its customer relationships with non-Defense Department agencies, including the Department of State, NASA and the intelligence community. It will also add capabilities in synthetic training, sensor-based technologies, intelligence cyber and information technology, spectrum and electronic warfare, space operations, environmental solutions, asset management, and mission support.

“The acquisition of PAE complements Amentum’s growth into intelligence and technology services, deepens its relationship with key agencies such as the Department of State, NASA and the intelligence community, and meaningfully adds to Amentum’s scale, depth of client relationships and breadth of capabilities,” John Vollmer, Amentum’s CEO, said in a statement.

PAE, which is based in Northern Virginia, provides services in the areas of business process solutions, counter-threat solutions, infrastructure and logistics, intelligence solutions, readiness and sustainment, and international logistics and stabilization.

Jefferies aerospace and defense analyst Shelia Kahyaoglu, who tracks PAE, said in a client note on Monday that PAE generates about 30 percent of its sales from DoD, driven by the Army and Navy with the Air Force close behind, followed by the State Department and intelligence community representing about 20 percent each, then NASA with 10 percent, the Department of Homeland Security 7 percent, and the Justice Department 3 percent.

Amentum, through its DynCorp acquisition, recently won a $1.3 billion contract from U.S. Customs and Border Protection for aviation maintenance and logistics support. PAE was the incumbent.

PAE’s board has already approved the deal. Platinum Equity, which owns about 22.5 percent of PAE’s outstanding shares, has agreed to vote in accordance with PAE’s board.

Terms of the deal include a “go-shop” period through Nov. 29 that allows PAE to solicit alternative acquisition proposals. If PAE terminates the merger agreement, it will have to pay Amentum between $15 million and $80 million depending on the circumstances of the breach.

Amentum is paying $10.05 per share in cash for PAE’s stock, representing a 70 percent premium over PAE’s closing price of $5.90 per share last Friday. PAE went public in February 2020 at $10 per share, and Kahyaoglu said closing price of the stock on Friday is off 37 percent since mid-July and that PAE’s revised earnings per share estimates have been revised down 9 percent in that period.

PAE’s financial adviser on the transaction is Morgan Stanley.