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August 4th, 2010 - Xe Hires BlackArch as Adviser as Blackwater Founder Sells Firm

News article from Bloomberg

Summary of the Blackwater Killings

Xe Hires BlackArch as Adviser as Blackwater Founder Sells Firm

 

By Gopal Ratnam

Bloomberg

August 4, 2010

 

Xe Services LLC, the security company formerly known as Blackwater Worldwide, brought in BlackArch Partners as an adviser as founder Erik Prince seeks a buyer for the business.

 

“I can confirm we have been hired as exclusive advisers on the sale process,” Tim Whitmire, a founder of Charlotte, North Carolina-based BlackArch, said today in a telephone interview. He declined to give a possible sale size, deadline or the names of any suitors.

 

Prince, the ex-Navy commando who formed Blackwater in 1997, said in June that the closely held company was being sold. Blackwater won contracts that included helping protect U.S. officials and embassies in Iraq and Afghanistan, while also drawing criticism in Congress for fatal civilian shootings.

 

BlackArch executives previously advised Moyock, North Carolina-based Xe on the sale of its aviation services unit to AAR Corp., according to the advisory firm’s website. The sale, valued at $200 million, was concluded in March.

 

Stacy DeLuke, a spokeswoman for Xe, couldn’t be reached by telephone regarding BlackArch’s hiring and didn’t immediately respond to an e-mail request. The company has declined to comment since disclosing its sale plans on June 7.

 

Talks With Buyers

 

Xe was in talks at the time with possible buyers, a person familiar with the matter has said, asking not to be identified because the details are private.

 

The Xe name was adopted about a year and a half ago, according to the company. In 2008, the U.S. House Oversight and Government Reform Committee reported that the firm’s employees were linked to 195 shooting incidents dating to 2005. Five ex- workers won dismissal of U.S. weapons and manslaughter charges on Dec. 31 in the 2007 deaths of 14 Iraqi civilians in Baghdad.

 

In August 2009, the New York Times reported that the U.S. Central Intelligence Agency had hired contractors from Blackwater to find and assassinate al-Qaeda operatives. The Times cited current and former government officials it didn’t identify.

 

Xe said in June it had taken “significant” steps in the previous 15 months to make it more attractive to a buyer, without elaborating. Also in June, it won $120 million in State Department security work in Afghanistan, CBS News reported, and a $100 million contract to protect CIA operations in the country, according to the Washington Post.

 

AAR Purchase

 

The Aviation Worldwide Services unit sold to Wood Dale, Illinois-based AAR provided planes and helicopters to the U.S. Defense and State departments to transport people and cargo worldwide.

 

Whitmire said BlackArch Vice President Gordie Vap advised on that sale while with Edgeview Partners, another Charlotte-based advisory firm. BlackArch principals completed about 200 transactions in industries ranging from aerospace to food and beverage and transportation, according to the company’s website.

 

Those deals include Transdigm Group Inc.’s 2008 purchase of CEF Industries, which Transdigm said was an $83 million acquisition.

 

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