STG Group, Inc. entered into a stock purchase agreement to acquire Global Defense & National Security Systems, Inc. (NasdaqCM:GDEF) from Polar Securities Inc., Bulldog Investors, LLC, Glazer Capital, LLC, Global Defense & National Security Holdings LLC, HighVista Strategies LLC and others in a reverse merger transaction on June 8, 2015. As per the terms of the deal, Global Defense will pay $75 million in cash and issue 8.5 million shares at $10.48 per share. Additionally, Global Defense will also issue 0.44 million shares contributed by the company's sponsor. In the event when the shareholding of STG Incorporated goes less than 56.7% of the outstanding shares, STG Incorporated may exchange a portion of the Cash Consideration for additional shares of common stock so that STG may own 56.7% stake in Global Defense. The purchase price is also subject to a working capital adjustment. STG has agreed not to solicit or encourage any other superior offer. As per the terms of the escrow, Global Defense will put $3.3 million cash and 0.31 million shares in escrow as part of consideration. The company intends to fund a portion of the purchase price through debt financing.

The transaction may be terminated if not completed within 180 days of the agreement. As part of the transaction, Simon Lee will serve as Chairman of the Board of Directors. The transaction has been unanimously approved by the Boards of Directors of STG Incorporated and Global Defense & National Security Systems, Inc. As on November 13, 2015, the transaction was approved by the shareholders of Global Defense & National Security Systems, Inc. The transaction is subject to approval of shareholders of Global Defense, regulatory approvals, executed and delivered escrow agreement, resignation of Director, delivery of a FIRPTA certification, delivery of audited financials, executed and delivered employment agreements, executed and delivered a confidentiality, non-competition and non-solicitation agreement, executed and delivered a registration rights agreement and executed, delivered a voting agreement, approval by GDEF's stockholders and other closing conditions. The deal is expected to close during quarter three of 2015. The closing was amended to September 30, 2015. As on October 2, 2015, the transaction is expected to close on October 28, 2015. The closing can be extended up to 60 days if certain regulatory approvals have not been obtained.

$2 million-$3 million in cost savings is expected to be realized over the next 12-18 months. Josh Klayman, Lawrence T. Yanowitch and Charles W. Katz of Morrison & Foerster LLP acted as legal advisors to Global Defense & National Security Systems, Inc. (NasdaqCM:GDEF) and William J. Mutryn and Jonathan F. Wolcott of Holland & Knight LLP acted as legal advisor to STG Incorporated. Branch Banking and Trust Company acted as escrow agent. Cowen and Company, LLC acted as financial advisor to Global Defense.