Science Applications International Corp. (NYSE: SAIC) announced Monday its plans to acquire Engility Holdings Inc. (NYSE: EGL), in a deal valued at $2.5 billion.
If completed, the all-stock transaction will create the second largest independent technology integrator serving government clients.
âThe highly complementary portfolios, combined with our similar cultures, operating models, and histories, make this transaction a compelling combination that enhances the value proposition for our customers, employees and shareholders,â commented Tony Moraco, SAICâs chief executive officer, and a five-time Wash100 winner.
âEngilityâs market-leading expertise inÂ next-generationÂ systems engineering and integration services, particularly among space, federalÂ and intelligence customers,Â will augment SAICâs strong mission, engineering and enterprise ITÂ offerings to create a more comprehensive suite ofÂ capabilitiesÂ serving a broader set of customers,â said Lynn Dugle, Engilityâs chairman, CEO and president, and a two-time Wash100 winner.
The acquisition, if completed, will double the SAIC’s space portfolio, to reach over $1 billion in total contract value. âWe see an opportunity for full lifecycle services in the space arena from architectures and engineering to payload support [to] launch, as well as ground systems,â Moraco said during a media call Monday. The combined entity’s space clients would include NRO, Air Force Space Command, NASA and NOAA.
Besides space, several SAIC market subsystems stand to gain from the acquisition. These include military training and simulation, consisting of a mix of classroom, virtual reality and augmented reality instruction; as well as mission systems and platforms architecture modernization, comprising both technology integration and implementation.
Moraco explained SAIC’s acquisition strategy focused on not only increasing its technical capabilities but also expanding market access to the intelligence, Air Force and health sectors.
In turn, Dugle highlighted the new data analytics capabilities the joint company would enjoy. âHow do you revolutionize [IT] services?â she asked, zeroing on the new opportunities facing the organization. Weâre well-positioned to modernize everything from targeting and analysis, to next-generation tradecraft, to vehicular modernization and beyond, Dugle said during the call.
Given our ability to embed more high performance computing assets and cyber capabilities in a range of technologies it all “gets exciting really quickly,” Dugle added.
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 Engilityâs board of directors.