Back to news

December 9, 2020 | International, C4ISR, Security

Northrop sells IT business to Veritas Capital for $3.4B

WASHINGTON — Northrop Grumman has struck a $3.4 billion deal to sell its federal IT and mission support business to Veritas Capital.

The agreement, announced Dec. 7, is expected to close by June 2021. At that point, Veritas plans to incorporate the Northrop business units with Peraton, a Veritas subsidiary that supports government customers and specializes in technology products for the space, defense and intelligence markets.

Northrop is expected to generate $2.3 billion in revenue, which will be funneled into share repurchases and debt retirement, the company said in a news release.

“This divesture allows us to drive value and reflects our strategy of focus on growing core businesses where technology and innovation are the key differentiators,” said Kathy Warden, Northrop's CEO and president. “We expect to create compelling value to our shareholders through this transaction and execution of our capital allocation strategy.”

Reports of the sale first surfaced in October.

Byron Callan, an analyst with Capital Alpha Partners, said that the sale shows there is still isn't consensus within the defense industry on how to organize IT and services businesses alongside more traditional hardware business units for products like aircraft, vehicles or other weapons.

Callan pointed to Lockheed Martin's sale of its information and global services business to Leidos in 2016; L-3′s sale of its IT solutions division to CACI in 2015; and Harris' sale of its IT business to Veritas in 2017, which later became Peraton. However, other major companies have acquired government IT companies, such as General Dynamics's purchase of CSRA in 2018.

“We have believed that as DoD spending flattens in the 2020s, primes could seek to jettison ‘non-core' businesses that will still be profitable, but face declining sales or more intense competition,” Callan wrote in an email to investors.

https://www.c4isrnet.com/industry/2020/12/08/northrop-sells-it-business-to-veritas-capital-for-34b/

On the same subject

  • House panel unveils $674.6B Pentagon spending bill

    June 11, 2018 | International, Aerospace, Naval, Land, C4ISR, Security

    House panel unveils $674.6B Pentagon spending bill

    BY REBECCA KHEEL - 06/06/18 12:39 PM EDT The House Appropriations Committee on Wednesday unveiled its $674.6 billion Pentagon spending bill for fiscal 2019. The bill would provide $606.5 billion in base discretionary funding, which is about $900 million less than the Trump administration requested but $17.1 billion more than this year's spending level. The bill would also provide $68.1 billion for a war fund known as the Overseas Contingency Operations (OCO) account. “With the changing global dynamics and ever-growing threats to our security, it is absolutely imperative that our military is properly trained, equipped and fully supported in order to do their jobs,” Appropriations Committee Chairman Rodney Frelinghuysen (R-N.J.) said in a statement. “This legislation does all of this by including robust funding for our troops, the defense programs and activities necessary to accomplish our national goals and ideals, and to continue to rebuild our military.” The money would pay for a boost of 15,600 troops across the military and a 2.6 percent pay raise for service members, both matching what was requested by the administration. The bill would also provide $145.7 billion for equipment purchases and upgrades. That's split $133 billion for base requirements — or $2.5 billion more than requested — and $12.7 billion in OCO. The procurement money includes $22.7 billion for 12 new Navy ships, two more ships than the administration requested. The two extra ships are littoral combat ships, which Congress continues to support buying — despite the Navy's plan to transition away from the ship — so that shipyards keep working and will be able to keep pace on future orders. The bill would also fund a slew of aircraft, including $9.4 billion for 93 F-35 fighter jets and $1.9 billion for 24 F/A-18E/F Super Hornet aircraft. The bill includes funding for the procurement of 16 more F-35s than requested. The plane is built by Lockheed Martin in defense appropriations subcommittee Chairwoman Kay Granger's (R-Texas) district. Granger said the bill is an extension of last year's efforts to address readiness shortfalls. “It is a product of countless meetings and briefings with our military leaders and demonstrates our commitment to ensuring the U.S. military is the strongest, most capable military in the world,” she said in a statement. “Our military must have the resources it needs to respond to and deter threats from countries like Russia, China, Iran and North Korea, and also counter violent extremists throughout the world.” http://thehill.com/policy/defense/391001-house-panel-unveils-6746b-pentagon-spending-bill

  • The Countries Where F-35 Sales Are Taking Off

    June 26, 2018 | International, Aerospace

    The Countries Where F-35 Sales Are Taking Off

    Since the first F-35 rolled off Lockheed Martin's production line in 2006, the fifth-generation multirole stealth fighter has taken the world by storm. U.S. F-35s deployed to Europe and the Pacific in 2017, and Israel has reportedly already used its jets in combat in the Middle East. Soon, the Arab world might get its first F-35 — the United Arab Emirates is in talks with the United States about buying the aircraft. To date, the program's reach has expanded to 12 nations around the globe, and all signs point to the F-35 continuing to dominate the Western fighter market for decades to come. But tensions between historically close NATO allies could threaten the fate of one partner nation's F-35 fleet: Turkey. Here's the breakdown of the global F-35 fleet. https://foreignpolicy.com/2018/06/22/the-countries-where-f-35-sales-are-taking-off/

  • Navy Awards Logistics Support Contract for Advanced Helicopter Training Program - Seapower

    March 10, 2021 | International, Aerospace, Naval

    Navy Awards Logistics Support Contract for Advanced Helicopter Training Program - Seapower

    PATUXENT RIVER, Md. — The U.S. Navy awarded Vertex Aerospace LLC (Vertex) a contract for $71.4 million on March 2 for the base year for the Contractor Logistics and Maintenance Support (CLS) in support of the Advanced Helicopter Training System...

All news