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SAIC’s Announced Engility Buyout: McAleese & Associates Provides Assessment

Jim McAleese

On the heels of SAIC’s planned $2.5 billion acquisition of Engility, consulting firm McAleese & Associates has released its “McAleese Assessment” of the deal.

The report includes key takeaways from the acquisition call held on Monday, including Tony Moraco, SAIC’s CEO, offering his view on the future of the federal budget environment.

“As you think about ~2022-2025 … most people think that current budget levels will not be sustained … [leading to a] more ‘austere’ budget … Not back to sequestration, but back to flatter budgets … We can take advantage of the upside near-term, and be … stronger … to navigate [a] slightly lower budget environment,” Moraco said during the call.

“We will still need another [2020-2021] budget deal about a year-and-a-half-out … Sequestration is still in place … With this diversification … it provides ‘down-side’ protection,” Moraco added.

On the same call, Lynn Dugle, Engility’s CEO, said, “I was not interested in scale for scale’s sake … But we were clearly experiencing the best market conditions that we have seen in a decade, and adding the capacity to attack that market through multiple large pursuits simultaneously could be an important advantage.”

“Engility is very proud to bring our space and intel portfolio to SAIC, and we are looking forward to bringing SAIC’s enhanced IT and mission services to our customers,” Dugle added.

If completed, the all-stock transaction will create the second largest independent technology integrator serving government clients.

SAIC and Engility expect the deal to close by February 1, 2019, the end of the fiscal fourth quarter. The combined company will add two board members from Engility’s board of directors.

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