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KEYW to sell 6.5M shares in public offering

HANOVER, Md. (AP) -- KEYW Holding Corp., which provides online security to the federal government, said Monday that it plans to sell 6.5 million shares of its common stock in an underwritten public offering.

The company said it plans to grant the offering's underwriters, RBC Capital Markets LLC, an option to buy up to an additional 975,000 shares to cover possible overallotments. It plans to use the offering's proceeds to pay down debt and to pay for part of its pending acquisition of Poole & Associates Inc.

Late Friday, KEYW announced plans to buy Sensage Inc., a privately held Redwood City, Calif.-based data security company, in a cash and stock deal worth at least $24 million.

Under the terms of the deal, KEYW will pay at least $15 million in cash and up to $9 million in its common stock to the Sensage equity holders. The company said it will pay another $3 million in cash and $7.5 million in stock if Sensage meets certain revenue goals for the second half of 2012.

KEYW said it expects the acquisition to slightly increase its fourth-quarter results. The deal is expected to close in October, subject to equity holder approval and other customary closing conditions, KEYW said.

The company plans to fund the rest of the cash part of its acquisition of Poole, as well as the cash part of its acquisition of Sensage, with existing debt. If the acquisitions do not close, the company will use the offering's proceeds for working capital, capital spending and other general corporate purposes.

KEYW shares fell 89 cents, or 6.9 percent, to $12.10 in afternoon trading.