Leidos Holdings (NYSE: LDOS), a Fortune 500 science and technology leader, announced Thursday that the company has entered into a definitive agreement to acquire 1901 Group, a leading provider for managed IT services and cloud solutions in the private and public market, in order to expand its cloud, IT services and digital modernization capabilities.
“We are pleased to welcome 1901 Group’s team of digital transformation experts who share Leidos’ commitment to making the world safer, healthier and more efficient through IT,” said Roger Krone, Leidos chairman and CEO and seven-time Wash100 Award recipient.
“Leidos and 1901 Group both strive to provide customers with progressive, agile and secure solutions. Together, we will be better positioned to continue successfully providing these critical solutions while navigating growing trends in the IT marketplace,” Krone added.
1901 Group delivers leading cloud, cybersecurity and enterprise-scale digital modernization services and capabilities that improve performance and reduce costs. Their unique approach applies technology and process automation to a set of repeatable and reusable services.
The acquisition will allow Leidos to respond to growing customer demand for more fixed-priced, utility-based business arrangements. Leidos will also leverage 1901 Group’s proven IT, cloud factories and fully-integrated service delivery platforms.
“1901 Group will provide substantial new capabilities to enhance the value we bring to existing defense customers and position Leidos to meet the growing demand for cloud-based solutions in the defense market,” said Leidos Defense Group President and fellow 2020 Wash100 Award winner Gerry Fasano. “The Leidos Defense Group will work to ensure these new capabilities are readily accessible to enhance our offerings and pursuits across the company.”
The Board of Directors for Leidos and the 1901 Group unanimously approved the transaction, which Leidos expects to fund in cash for the purchase price of $215 million. The acquisition is expected to close the first quarter of 2021 with Baird serving as the exclusive adviser to 1901 Group.
“1901 demonstrates how innovative companies can explore and demonstrate success in new market areas, like managed services, and create a compelling strategic market position and garner the interest from larger businesses,” said John Song, managing director for Baird.