Staff Reports
WC Monitor
1/29/2016
The primary ownership of Hanford Site contractor Mission Support Alliance would transfer from Lockheed Martin to the engineering firm Leidos under a deal struck between the two international companies. Leidos Holdings entered into a definitive agreement with Lockheed Martin this week to merge with Lockheed’s realigned Information Systems and Global Solutions business. Jacobs Engineering and Centerra Group would continue to own smaller stakes in the Hanford support services contractor.
The agreement will form a new company, separate from Lockheed Martin, that aligns the Information Systems and Global Solutions business with a leader in government services, said Bill Johnson, MSA president, in a message to employees. “Once the transaction closes, the new business will immediately become a larger and even stronger competitor in government IT and technical services,” Johnson said. “The new company will be better positioned to deliver a broader and more affordable portfolio of capabilities and services.” The agreement should have minimal impact on MSA’s daily operations and its 1,800 employees, he said. “MSA is a separate company and we utilize systems and processes specific to supporting our DOE client and their mission,” according to Johnson. The deal is expected to close in the second half of 2016.
The $5 billion transaction would include a payment of approximately $1.8 billion to Lockheed Martin, which it plans to use to repay debt, pay dividends, or repurchase stock. After shedding the division, Lockheed Martin will concentrate on its aerospace and defense business. Lockheed Martin stockholders would receive 50.5 percent, or about 77 million shares, of the outstanding equity of Leidos, with an estimated value of $3.2 billion. Leidos’ existing shareholders would continue to hold the remaining 49.5 percent of the outstanding shares of the company. “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,” said Roger Krone, Leidos chief executive officer, in a statement. Lockheed Information Systems and Global Solutions has 16,000 employees and Leidos has 19,000.
Mission Support Alliance provides a range of services at Hanford, including emergency response and training, fleet and road upkeep, cybersecurity, and utility operations.
