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Leidos to Buy Gibbs & Cox for $380M in Maritime Market Expansion Push; Roger Krone Quoted

Leidos (NYSE: LDOS) has agreed to acquire engineering and design firm Gibbs & Cox in a cash transaction worth $380 million as part of efforts to further expand into the maritime market and add engineering talent to its team.

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Leidos said Tuesday it expects the deal to be completed in the second quarter of fiscal year 2021, subject to customary closing conditions.

Arlington, Virginia-based Gibbs & Cox operates with 525 employees focused on delivering naval architecture and marine engineering support to the U.S. Navy and government customers and international clients. Its core capabilities also include electrical engineering and design integration, environmental, safety and health, program management, structural engineering and production design.

Roger Krone, chairman and CEO of Leidos and a 2021 Wash100 Award winner, said the acquisition will help Leidos broaden its maritime business and add marine engineering, naval architecture, 3D modeling and design and other services to the set of capabilities the company offers to customers.

“In addition to being positioned on the front end of next generation vessels, the business combination provides significant tailwinds for participation in the maritime unmanned market and accelerates Gibbs & Cox expansion in the undersea domain,” Krone told analysts during an earnings call Friday.

He said the company expects the transaction to be accretive to non-GAAP earnings per share.

Leidos saw its full fiscal year 2020 revenue rise 10.8 percent to $12.3 billion and recorded $3.25 billion for the fourth quarter, representing a 10.1 percent increase from the prior year period. The company ended the year with a backlog of $31.9 billion, with $6.6 billion of that funded.

The Reston, Virginia-based information technology and engineering services contractor posted $17.8 billion in full year FY 2020 net bookings, reflecting a book-to-bill ratio of 1.4.

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