Harris Corp. (NYSE: HRS) has agreed to sell its government information technology services business to private equity investment firm Veritas CapitalÂ for approximately $690 million in the military radio maker’s second majorÂ divestiture over less than one month as part of its larger portfolio reshaping effort.
The deal comes approximately three weeks after Harris completed the $425 million sale of its CapRock maritime communications business to SpeedCast InternationalÂ to help pay down debt and contribute cash to shareholder return.
Harris purchased fellow defense technology manufacturer ExelisÂ in May 2015 for $4.75 billion.
Melbourne, Fla.-based Harris announced in August anÂ agreement with Barry Rosenstein’s activist hedge fund Jana PartnersÂ on two mutualÂ appointments to the board of directors after the group became one of Harris’ 10 largest shareholders.
Jana is the same fund that took a 6-percent stake in Computer Sciences Corp. (NYSE: CSC) in February 2015 and CSC subsequently spun off its U.S. public sector business approximately nine months later to form theÂ federal IT services contractor now known as CSRA (NYSE: CSRA).
Harris expects the sale of its government IT services business to complete by the end of its current fiscal year in July and decrease FY 2018 earnings by $0.10-$0.15 earnings per share.
The Herndon, Va.-based unit expects to record $1.07 billion in FY 2017 revenue and carries out IT and engineering-managed services for federal agencies in the defense, intelligence and civilian arenas.
Harris will retain its air traffic management businessÂ and operate under three segments post-close: electronic systems, communication systems, and space and intelligence systems.
Houlihan Lokey advised HarrisÂ on the sale of the IT services business.
Veritas Capital purchased government services contractor Alion Science and TechnologyÂ in 2015 for what Dow Jones reported at the time as nearly $300 million.