Britain-based defense contractor BAE Systems PLC announced in a trading update released Thursday morning it will hold onto the manpower and services business unit in the company’s U.S. subsidiary that operates as BAE Systems Inc.
BAE Systems PLC said in April it would undertake a strategic review of the units that are part of the U.S. subsidiary’s intelligence and security sector for a potential sale.
“The review has concluded that retaining the businesses delivers greater value. The business continues its good performance and order intake, ” the parent company said.
New York-based private equity firm Veritas Capital and Reston, Virginia-headquartered government contractor Leidos were reportedly suitors for the business at different points, Reuters reported Wednesday.
BAE Systems Inc.’s services unit recorded nearly $800 million in 2014 sales and has close to 9, 000 employees that provide information technology and support services to U.S. government agencies.
The subsidiary’s geospatial intelligence, cybersecurity and intelligence businesses were not part of the review.
BAE’s decision to retain its U.S. government services business leaves Lockheed Martin (NYSE: LMT) and L-3 Communications (NYSE: LLL) as the remaining two large publicly-traded defense contractors who are looking at a potential sale or spinoff of their own services segments.
Both Lockheed and L-3 have told investors they want to reach a decision by the end of the year.