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HII Strikes $1.65B Cash Deal for Alion Science; Andy Green Quoted

Huntington Ingalls Industries (NYSE: HII) has agreed to buy Alion Science and Technology from Veritas Capital for approximately $1.65 billion in cash as part of a push to expand its technical capabilities and portfolio of national security platforms.

HII said Tuesday it expects the transaction to conclude in the second half of 2021 and help broaden its capabilities in multidomain distributed operations meant to meet future readiness and modernization priorities of the U.S. Navy and the Department of Defense.

Alion, which will operate as part of HII’s Technical Solutions division upon the deal’s closing, provides research and development and engineering support in intelligence, surveillance and reconnaissance, cyber, data analytics and military training and simulation, among other areas, for intelligence community and DOD customers. The company operates with more than 3,200 employees with over 80 percent of them holding security clearances. It has over $5 billion in estimated contract value and $3 billion in backlog.

“The combination of Alion and our Technical Solutions business represents a significant value creation opportunity that broadens our capabilities and customer access in our target markets,” said Andy Green, executive vice president and president of HII Technical Solutions and a 2021 Wash100 Award winner.

HII said it anticipates Alion to accelerate Technical Solutions division’s projected pro forma compound annual growth rate to 7 percent to 9 percent through 2024 and contribute approximately $1.6 billion in fiscal 2022 revenue and about $135 million in adjusted earnings before interest, taxes, depreciation and amortization.

HII will use new term loan facility and senior notes to fund the acquisition and expects to incur about $25 million in financing- and transaction-related expenses in 2021.

Credit Suisse and Jones Day served as financial adviser and legal counsel, respectively, to HII. Renaissance Strategic Advisors and Arena Strategic Advisors were also HII’s advisers in the transaction.

Macquarie Capital advised Alion on the transaction’s financial aspect, while Milbank acted as its legal counsel.

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