Reston, Va.-based contractor Science Applications International Corp. (NYSE: SAIC) has agreed to buy Unisys‘ (NYSE: UIS) federal arm for approximately $1.2B cash in a push to expand digital transformation support for the U.S. government.
SAIC said Thursday it expects to close the transaction by the end of its fiscal 2021 first quarter and to fund the deal with cash on hand plus incremental debt.
The Unisys Federal business — which earned $689M in revenue for the 12 months ended Sep. 30, 2019 — helps federal civilian and defense customers to modernize information technology infrastructure, migrate to cloud computing environments, update enterprise applications and secure IT operations.
“This exciting opportunity advances our strategy by building on our modernization capabilities, increasing customer access, accelerating growth and enhancing shareholder value,” Keene added.
The deal is projected to be accretive on SAIC’s earnings before interest, taxes, depreciation and amortization, cash and non-GAAP earnings per share.
Centerview Partners and Sullivan & Cromwell are Unisys’ financial and legal advisers on the business sale process, respectively.
Guggenheim Securities and Citigroup Global Markets serve as SAIC’s financial advisers in the transaction, while King & Spalding acts as its legal counsel. Boutique management consultancy Avascent assisted in the business due diligence and strategic processes.