Veritas Capital has agreed to acquire Northrop Grumman’s (NYSE: NOC) federal information technology and mission support services business for approximately $3.4B in cash.
The transaction is expected to conclude in the first half of 2021 and Veritas said Monday it expects to merge the Northrop federal IT business with its portfolio company Peraton upon the deal’s closing, subject to regulatory approvals and other customary closing conditions.
The federal IT business of Northrop provides cybersecurity, cloud, mission-critical application development, data analytics and advanced engineering support to defense, civil, intelligence, space and health agency clients and is expected to record $2.3B in 2020 revenue.
Ramzi Musallam, CEO and managing partner of Veritas Capital and a five-time Wash100 awardee, said the transaction will enable Veritas to establish a technology-enabled services platform that can deliver support to a wide range of critical government missions.
Stu Shea, chairman, president and CEO of Peraton and a four-time Wash100 awardee, will continue to oversee the combined business.
“We look forward to welcoming the federal IT and mission support services business’ experienced team to Peraton,” Shea said. “The transaction will also expand our presence in both the federal civil and health marketplaces while continuing to add to our capabilities in the mission-critical IT domain.”
Kathy Warden, chairman, CEO and president of Northrop and a five-time Wash100 award recipient, said the divestiture allows the company to focus on building up core businesses and create value for shareholders.
Northrop said it expects to use the proceeds from the deal for debt retirement and share repurchases.