The nonprofit research firm RTI International on Monday said it has acquired Engility Corp.’s [EGL] international development services business, which provides solutions to the State Department’s U.S. Agency for International Development (USAID).

 Engility said in an investment filing last Friday that the sale price is $24 million, which is less than the carrying value of the assets for its International Resources Group (IRG) business and will result in a charge of between $20 million and $30 million in pre-tax income in its fourth quarter that ended on Dec.  31, 2016. Engility said that the proceeds from the sale will go toward paying down debt.

Engility CEO Lynn Dugle is focusing her company on its core capabilities. Photo: Engility
Engility CEO Lynn Dugle. Photo: Engility

 Engility said it expected its business with USAID this year to generate about $70 million in sales but have no material cash flow or profitability.

RTI, which is based in North Carolina, said the IRG acquisition enhances its development work and footprint in food security and agriculture, energy, water, natural resources management, climate resistance, and conflict, allowing it to bring more services to clients in these areas. The deal opens new or expanded geographical footprints in Rwanda, Ukraine, Guatemala, the Philippines, Senegal, Tanzania, and Thailand.

RTI also said the acquisition gives it new capabilities in USAID management and technical training and disaster preparedness, and better positions it to conduct integrated development programming. IRG will operate as an independent subsidiary for a period of time to facilitate and orderly transition, RTI said.

Engility said it sold IRG following a strategic review of the business, saying that the USAID work isn’t aligned with the company strategic direction, “which is to focus on highly technical services, including high-performance computing, solutions provisioning and enterprise modernization.”

IRG has 300 employees.