Northrop Grumman, the well-known American defense company has reportedly sold its federal Information Technology and services business to Veritas Capital, for an estimated cost of around $3.4 billion.
The agreement was announced on Monday, and would be finalised by June next year, during which Veritas would assimilate Northrop business with its subsidiary Peraton. It specialises in technology products for government customers related to space, defense, and intelligence.
According to a statement released, the Northrop CEO said that this transaction highlights the company’s focus on growing core business where ‘technology and innovation are the key differentiators.’ The firm plans to generate $2.3 billion in revenue from this deal, which would be directed to share repurchases, debt retirements, and to offset dilution from the transaction.
“We look forward to welcoming the federal IT and mission support services business’ experienced team to Peraton. With this addition, we will continue to position Peraton as an industry leader, applying the technology and mission understanding that will solve our customers’ most daunting challenges and mission needs,” said Stu Shea, President and CEO, Peraton. This deal would provide the company a much-needed boost in its government dealings footprint.
“Our differentiated, complementary solutions and deep relationships with our respective customer bases give us the scale and resources to continue to address the evolving needs of government customers. 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.
We are confident in our growth trajectory as we leverage Veritas’ industry expertise and serve as the pre-eminent partner to the government,” Shea added.
Veritas Capital is a private investment firm based in New York that provides critical technology-related support and services to government and commercial customers worldwide. It also aims to create value by strategically investing into companies through organic and inorganic means.