By Calvin Biesecker

The private equity firm Providence Equity Partners on Friday said it has agreed to acquire the government information technology (IT) and services firm SRA International [SRX] for $1.9 billion in cash, boosting its presence in the federal space.

Terms of the deal allow SRA to continue seeking another potential buyer for 30 days from the time of the merger agreement. Providence has agreed to pay $31.25 for each share of SRA common stock, representing a premium of just over 10 percent based on the closing price of $28.36 on March 31.

SRA, which was founded in 1978 and went public in 2002, has 7,300 employees and did $1.7 billion in sales in its latest fiscal year and posted net income of $20.9 million. Once the acquisition closes, which is expected to occur in the third quarter of 2011, SRA will become a private company.

In the government services business, Providence currently owns Altegrity, an 11,000 employee company that offers government and commercial customers a range of services including security screening, security training, analytics and risk consulting. Two of Altegrity’s better known businesses are USIS, which offers a range of security solutions, and Kroll, the risk consulting company.

With SRA, Providence gets a pure play government information technology and services firm.

“The government information services market is a highly attractive area of investment for Providence, and SRA is a leading innovator within the national security, civil government, global health and intelligence sectors,” Julie Richardson, a managing director at Providence, said in a statement.

SRA’s senior management will remain intact once the deal closes with Stan Sloane as president and CEO and Ernst Volgenau, the founder of the company, as chairman.

The acquisition must still be approved by a majority of the outstanding shares of SRA’s stock. Volgenau, who owns 21 percent of the outstanding shares and has 71 percent of the voting rights, has agreed to vote in favor of the merger. He will roll over a portion of his equity interest in SRA to remain a significant shareholder in the privately held firm.

SRA’s financial adviser on the deal is Houlihan Lokey. SRA began exploring an acquisition last October and disclosed in January that it was reviewing its strategic alternatives. The company said on Friday that despite media speculation in recent months, it never received an earlier offer of $2 billion although there was an “expression of interest” from a third party in the range of $31 to $32 per share that did not materialize.

Providence’s financial advisers on the deal are Citigroup [C] and Bank of America [BAC].

Providence is using a combination of equity and debt to finance the acquisition.