In a memo to employees quoted in the San Diego Union-Tribune, SAIC Chairman and Chief Executive Ken Dahlberg said a shareholder vote on a proposed corporate reorganization that would include an IPO will be delayed by a month.
Dahlberg said the vote has been rescheduled for September 27. “The delay is unavoidable and necessary to provide you with time to understand the implications of the recently adopted Pension Protection Act of 2006 (PPA) on the Company and its retirement plans,” Dahlberg wrote in his memo.
SAIC, a $7.8-billion research conglomerate, disclosed plans in 2005 to raise up to $1.73 billion through the IPO. In its regulatory filings, the company said most of the proceeds from the stock sale would be distributed to SAIC’s employee shareholders.
Even though Dahlberg blamed the delay on the new law, he did not provide details about the law’s impact on his company’s IPO, and an SAIC spokesman declined further comment to the Union-Tribune.
The only hint came in a Dahlberg comment about deeper issues affecting the firm’s financing. “Among other things,” he said in the memo, “this 900-page legislation provides participants with rights to diversify or sell company stock in retirement plans.”
The PPA includes a diversification provision mandating that, if a company matches employee contributions to a 401(k) plan using company stock, an employee can diversify out of company stock into other plan investments once he or she has three years of service.
The latest development is the second time in less than a year the government contractor has delayed its plans to go public. SAIC put off the move in December, citing an unforeseen loss in a troubled contract to build a command-and-control security network for the 2004 Olympic Games in Athens, Greece.
SAIC specializes in providing information technology services for the US military and some of the government’s most secretive agencies. It employs more than 43,000 people. Also known as Science Applications International Corp. SAIC ranks as one of the nation’s biggest employee-owned companies, the Union-Tribune said.