Leidos Holdings, of Reston, Va., is officially a partner in the main support services contractor at the Energy Department’s Hanford Site, having completed its nearly $5-billion stock-and-cash acquisition of Lockheed Martin’s Information Systems & Global Solutions unit, the companies announced Tuesday.
Leidos announced on Aug. 8 that its shareholders had overwhelmingly approved the acquisition. The IS&GS business being merged with Leidos is headquartered in Gaithersburg, Md., and run by Sondra Barbour, a Lockheed veteran. The massive acquisition about doubles the size of Leidos to roughly $10 billion in annual revenue, according to the company’s press release about the merger and its latest 10-K filing with the U.S. Securities and Exchange Commission.
The deal was financed with $2.8 billion in newly issued Leidos common shares, along with $1.8 billion in cash. The closure of the transaction was to trigger $1 billion worth of special dividend payments to Leidos common stockholders, according to the company.
Lockheed’s shares fell on the news, as the profit boost from the sale was smaller than analysts expected.
Leidos will now partner with Jacobs and Centerra in leading Mission Support Alliance, which provides emergency response, cybersecurity, infrastructure, and other services at the Department of Energy facility in Washington state. The consortium is in the seventh year of its Hanford Site contract, which was awarded in 2009 and, including options, could be worth $3.6 billion through 2019. DOE holds one more option on the deal: a two-year extension with a performance period that begins May 26, 2017.
“MSA is not anticipating any impacts to day-to-day operations because of the transaction,” company spokeswoman Rae Moss told Weapons Complex Morning Briefing Wednesday.
