Northrop Grumman to sell IT, mission support biz for $3.4B
Unit to become part of Herndon-based Peraton
Falls Church-based Fortune 500 aerospace and defense contractor Northrop Grumman Corp. announced late Monday that it will sell its federal IT and mission support services business for $3.4 billion in cash to Herndon-based national security contractor Peraton, a Veritas Capital affiliate.
This year, the Northrop Grumman business unit is expected to generate approximately $2.3 billion in revenue. The transaction is expected to close in the first half of 2021 and is subject to approvals and closing conditions. Sale proceeds are expected to go to share repurchases and debt retirement.
“This divesture allows us to drive value and reflects our strategy of focus on growing core businesses where technology and innovation are the key differentiators,” Northrop Grumman CEO, President and Chairman Kathy Warden said in a statement. “We expect to create compelling value to our shareholders through this transaction and execution of our capital allocation strategy.”
When the transaction closes, Veritas expects to combine the Northrop Grumman business unit with Peraton. In 2017, the former government services business Harris Corp. became Peraton after it was acquired by Veritas Capital. Peraton, through the U.S. federal contracts, provides systems development and mission capability integration.
Northrop Grumman employs more than 90,000 people and reported $33.8 billion in 2019 revenue.