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Veritas Capital Acquires Northrop Grumman’s Federal IT Services Business

Private equity firm Veritas Capital is acquiring Northrop Grumman‘s federal IT and mission support services business for $3.4 billion in cash, and will merge the acquired business unit into Peraton. The acquired business unit’s revenue will be about $2.3 billion for 2020, the buyer says.

This is M&A deal 510 that ChannelE2E has covered so far in 2020. See the full M&A deal list here.

The acquired business unit’s expertise spans cybersecurity, data analytics, cloud, mission-critical application development and advanced engineering to defense, intelligence, space, civil and health customers, Veritas Capital says.

The acquired business unit will merge into Peraton, a Veritas Capital portfolio company with roughly 3,500 people. Peraton of Herndon, Virginia, offers space, intelligence, cyber, defense, homeland security and communications capabilities to select federal agencies and commercial entities. Peraton Chairman, President & CEO Stu Shea will lead the combined business.

Federal IT Services Acquisition: Executive Perspectives

Stu Shea, president and CEO, Peraton

Ramzi Musallam, CEO, Veritas Capital

In a prepared statement about the deal, Veritas Capital CEO Ramzi Musallam said:

“The federal IT and mission support services business of Northrop Grumman has an exceptional track record of delivering innovative technology that addresses the critical needs of its government agency customers. We believe that with our focus, vision and resources, we can create a scaled, technology-enabled services platform that is well-positioned for long-term growth and able to deliver unparalleled support to a broad range of critical government missions.”

Added Peraton’s Shea:

“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. 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.”

Northrop Grumman officials were not quoted in the announcement. The deal is expected to close in the first half of 2021.

About Veritas Capital and Peraton

Veritas Capital has owned Peraton since 2017. The business was formed when Veritas Capital acquired and renamed a government services business from Harris Corp. The purchase price for that deal was $690 million.

Veritas Capital is not to be confused with Veritas Technologies, a storage and data protection company backed by private equity firm The Carlyle Group.

Meanwhile, M&A activity in the government IT services market remains strong, according to ChannelE2E’s ongoing federal, state and local government IT coverage.

 

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