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Peraton, Backed By Veritas Capital, Acquires Perspecta


Peraton, backed by private equity firm Veritas Capital, has acquired government IT consulting firm Perspecta for $7.1 billion.

This is M&A deal number 85 that ChannelE2E has covered so far in 2021. See all technology M&A deals for 2021 and 2020 listed here.

Following the closing of the all-cash deal, which is expected to close in the first half of 2021, Perspecta will be rolled into Peraton, the company said. Veritas is already a significant stockholder in Perspecta, holding approximately 14.5 percent of Perspecta’s outstanding shares.

The combination of the companies will create a leading government technology provider capable of delivering end-to-end capabilities in IT and mission support, Veritas said.

Peraton Acquires Perspecta: Assembling A Strong Portfolio

Mac Curtis, Chairman and CEO, Perspecta
Mac Curtis, Chairman and CEO, Perspecta
Stu Shea, Chairman, President and CEO, Peraton

Ramzi Musallam, chief executive officer and managing partner of Veritas commented:

"As a long-time investor in Perspecta and its predecessor companies for over a decade, we have always recognized Perspecta for its market differentiation, leading-edge IP, and focused execution in the government technology space. Through the combination with Peraton, we have assembled a strong portfolio of top-tier government technology providers with complementary offerings and are confident that the addition of our resources and industry expertise will enable Perspecta to deliver even greater value to its customers and stakeholders."

Mac Curtis, chairman and chief executive officer of Perspecta, added:

"Today marks the beginning of an exciting new chapter for Perspecta. This announcement is the culmination of a comprehensive review process. Having considered all opportunities available, the Perspecta Board of Directors is confident this transaction offers the most compelling value creation for shareholders. Together with Peraton and with the flexibility Perspecta will have as a private company supported by Veritas, Perspecta will be well-positioned to build on our momentum and continue executing on customer commitments as Perspecta delivers cyber, digital-transformation and mission-focused solutions. Looking ahead, Perspecta remains fully committed to serving our customers with dedication, integrity, and excellence and ensuring a seamless transition for our employees."

Stu Shea, Chairman, president and chief executive officer of Peraton said:

"Perspecta brings highly skilled talent and differentiated technology expertise across a broad range of customers in the government markets which will complement our offerings and enhance our ability to drive innovation. Together, we will create a top-tier, privately-owned government technology business with a focus on missions of consequence. We look forward to welcoming the Perspecta team to Peraton and to building on our growth and success as a proven and trusted partner."

Schulte Roth & Zabel is serving as legal advisor to Veritas and Peraton. Goldman Sachs and Stone Key Partners are serving as financial co-advisors and Paul, Weiss, Rifkind, Wharton & Garrison is serving as legal advisor to Perspecta in connection with the transaction.

Under the terms of the agreement, Perspecta stockholders will receive $29.35 per share in cash. Perspecta, which employs over 14,000 people, won a number of large federal contracts last year, including an $824 million, five-year deal with the National Geospatial Intelligence Agency.

Veritas’ Booming Government IT Offerings

Ramzi Musallam, CEO and Managing Partner, Veritas

It seems as though Veritas has little apprehension over spending large sums for government IT firms. In December 2020, the firm acquired Northrop Grumman’s federal IT and mission support business for $3.4 billion in cash, merging the division into Peraton.

Peraton itself was founded in 2017 when Veritas acquired and renamed a government services business from Harris Corp. The purchase price for that deal was $690 million.

Meanwhile, in March 2020, DXC Technology sold its US State and Local Health and Human Services Business to Veritas Capital for $5.0 billion. That transaction led to the creation of a new company dubbed Gainwell Technologies, which will operate independently and focus on Medicaid management information systems, program integrity, fiscal agent services, care management, eligibility services, and immunization registry.

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.