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Saturday, October 14, 2006

Weekend Edition:SAIC IPO Priced at the High-End of the Range

The long-awaited IPO of SAIC Inc. has finally made it to market. SAIC priced 75 million shares at $15.00, at the top of the $13.00 to $15.00 range. It will trade on NYSE under the "SAI" ticker.

SAIC is one of the leading large private defense contractors with a focus on technology and IT operations. 89% of its revenues come from various departments inside the US, and most of that is pertaining to armed forces contracts.

This IPO has literally taken years to come to fruition because of employee voting requirments and because of multiple share classes that had to be consolidated. There was also one last pre-IPO dividend paid out, so the last balance sheet may be a little lighter on the cash at current date.

If you will recall, Cramer just touted this IPO early this week before the deal was even priced and he said anything up to $20 is in-line with other defense contractors.

There is also a financial and backgrounder piece here if you wish to review, but this is a name that defense oriented investment managers almost have to have some exposure for their investment portfolios.

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