Lockheed Martin has reached a $5 billion agreement to transfer its government information technology and technical services business, including Hanford contactor Mission Support Alliance, to Leidos.
Lockheed Martin is the primary owner of Mission Support Alliance, which provides sitewide services at the Hanford nuclear reservation under a Department of Energy contract. Mission Support Alliance has 1,800 employees.
“Once the transaction closes, the new business will immediately become a larger and even stronger competitor in government IT and technical services,” said Bill Johnson, Mission Support Alliance president, in a message to employees Tuesday. “The new company will be better positioned to deliver a broader and more affordable portfolio of capabilities and services to customers.”
The combined company will be a more diversified leader in the markets we serve, giving us the scale and access to markets that enable further growth.
Roger Krone, Leidos chief executive
Digital Access for only $0.99
For the most comprehensive local coverage, subscribe today.
Johnson said the change should have minimal impact on daily operations at Hanford.
“MSA is a separate company and we utilize systems and processes specific to supporting our DOE client and their mission,” he told employees.
Lockheed Martin said its non-Hanford business in Richland also would be affected by the agreement, but no details were available Tuesday.
The transaction with Leidos is expected to close during the last half of this year. It includes Lockheed Martin Information Systems and Global Solutions, which employs about 16,000 employees worldwide.
Lockheed Martin would receive a one-time payment of $1.8 billion as part of the proposed $5 billion deal. The company’s shareholders will receive about 77 million Leidos shares with an estimated value of $3.2 billion, or a 50.5 percent stake in Leidos common stock.
Leidos has 19,000 employees and Lockheed Martin Information Systems and Global solutions has 16,000 employees.
The deal would allow Lockheed Martin to focus on its remaining aerospace and defense business.
Leidos has 19,000 employees and is based in Reston, Va. For its last fiscal year, which ended Jan. 30, 2015, it had revenue of about $5 billion.
It was founded 46 years ago and specializes in data analytics, systems engineering and cybersecurity.
“The combined company will be a more diversified leader in the markets we serve, giving us the scale and access to markets that enable further growth,” Roger Krone, Leidos chief executive, said in a statement.
Lockheed Martin also serves as a subcontractor to Mission Support Alliance, providing information technology services. The subcontract was put out to bid in the fall as part of the normal business cycle, said Rae Moss, MSA spokeswoman. A subcontractor has not been named.
Mission Support Alliance holds the DOE contract until 2019 to provide services at Hanford that include information technology, utilities, security, fire protection, management of the HAMMER training center, road maintenance and portfolio management for DOE, including providing data to help DOE plan for and meet deadlines.