Leidos Completes Acquisition of Dynetics, Expanding the Company’s Portfolio with New Offerings and Technical Capabilities
JANUARY 31, 2020
Leidos Holdings, Inc. (NYSE: LDOS) (“Leidos”), a FORTUNE® 500 science and technology leader, today announced that it has completed the acquisition of Dynetics, Inc. (“Dynetics”), an industry-leading applied research and national security solutions company, for approximately $1.65 billion in cash. The transaction was previously announced on Dec. 17, 2019.
Dynetics will operate as a wholly-owned subsidiary of Leidos, and Dynetics’ Chief Executive Officer David King will continue to lead the business, reporting directly to Leidos’ Chairman and Chief Executive Officer Roger Krone.
Based in Huntsville, Ala., with offices throughout the United States, Dynetics is a leading provider of high-technology, mission-critical services, and solutions to the U.S. Government, with a proven history of addressing the nation’s most challenging and technologically advanced missions. This combination of capabilities enhances Leidos’ competitive position across its Defense, Intelligence, and Civil Groups, and also accelerates opportunities within the Leidos Innovations Center (LInC), for customer-focused research, development, and rapid prototyping.
“Dynetics and Leidos share a commitment to advancing technology to address the toughest scientific and engineering challenges of our day. This combination adds innovative capabilities in our targeted growth areas while expanding our secure agile production capabilities, secure agile manufacturing, and increasing our penetration with key customers,” said Krone. “We are pleased to welcome an outstanding team of 2,300 employees with a shared culture of innovation and technical expertise that will benefit our collective customers and drive our continued success.”
“Today is an exciting day for Dynetics as we embark on our future with Leidos. We know that our highly-skilled team will continue to provide excellent service to our customers and this will enable us to provide even more capabilities to our customers. Our solutions and capacity will continue to grow through this partnership. We are eager to share our culture and join the Leidos family,” said King.
Transaction Details
The transaction is expected to be immediately accretive to Leidos’ revenue growth, EBITDA margins, and non-GAAP diluted earnings per share upon closing.
Cash consideration of approximately $1.65 billion was funded through excess cash on hand and $1.25 billion of short-term borrowing capacity.
Leidos will provide detailed guidance for the expected financial impacts of the acquisition on its 2020 results during its upcoming earnings call, scheduled for Feb. 18 at 8 a.m. ET.
Advisors
Leidos retained Baird as an exclusive financial advisor and Skadden, Arps, Slate, Meagher & Flom LLP as legal advisor in connection with the transaction. Leidos also retained KPMG as accounting advisor. Dynetics retained Jefferies LLC as exclusive financial advisor and King & Spalding LLP as legal advisor in connection with the transaction. Dynetics also retained Grant Thornton LLP as the accounting advisor and Avascent for strategic industry advisory services.
About Leidos
Leidos is a Fortune 500® information technology, engineering, and science solutions and services leader working to solve the world’s toughest challenges in the defense, intelligence, homeland security, civil, and health markets. The company’s 36,000 employees support vital missions for government and commercial customers. Headquartered in Reston, Va., Leidos reported annual revenues of approximately $10.19 billion for the fiscal year ended December 28, 2018. For more information, visit www.leidos.com.
