An investment group with ties to the founder of the company formerly known as Blackwater announced Friday that it has bought the security firm, which was heavily criticized for its contractors’ actions in Iraq.
Terms of the deal were not disclosed. But the statement said owner and founder Erik Prince will no longer have an equity stake and no longer be involved in Xe’s management or operations. The company will be managed by a board appointed by the equity holders and will include independent, unaffiliated directors, the statement said.
Prince founded the company in 1997 along with former colleagues from the Navy SEALs.
The ownership group is led by two private equity firms, including New York-based Forte Capital Advisors. Forte managing partner Jason DeYonker has been a longtime financial adviser to Prince, helping him expand the Moyock, N.C., training grounds and negotiating Blackwater’s first training contracts with the U.S. government.
“The future of this industry belongs to those companies with the highest standards of governance, transparency, and performance,” DeYonker said.
Xe announced in June that it was seeking a buyer. At the time, Prince said selling the company was a difficult decision, but constant criticism of Xe helped him make up his mind.
“Performance doesn’t matter in Washington, just politics,” he said.
In August, Prince moved to Abu Dhabi.
The private company became famous as Blackwater, which provided guards and services to the U.S. government in Iraq, Afghanistan and elsewhere. It became one of the most respected defense contractors in the world, but also attracted sharp criticism over its role in those missions.
It has been trying to rehabilitate its image since a 2007 shooting in Baghdad that killed 17 people, outraged the Iraqi government and led to federal charges against several Blackwater guards. The accusations later were thrown out of court after a judge found prosecutors mishandled evidence.
In March, Senate Armed Services Committee Chairman Carl Levin suggested the Pentagon should consider banning Xe from a $1 billion deal to train Afghan police. The Michigan Democrat said he thought the company’s involvement was hindering the U.S. mission in Afghanistan.
Earlier this year, Xe sold its aviation division for $200 million to Wood Dale, Ill.-based AAR Corp. Also, five former executives, including Gary Jackson, the company’s ex-president, were indicted on charges of conspiring to violate federal firearms laws. Jackson was among the top officials who left the company last year in a management shake-up.
Copyright © 2010 The Associated Press