Northrop Grumman to Buy Federal Data for $127 Million
Northrop Grumman Corp. will acquire Federal Data Corp. for $127 million in a deal aimed at boosting Northrop’s information technology business, the companies said Wednesday.
Federal Data, a developer of software and computer services for federal agencies, will be integrated into Northrop’s information technology business Logicon, said Kent Kresa, Northrop’s chairman, president and chief executive.
In addition to $127 million in cash, Century City-based Northrop will assume $157 million in debt and pay $18 million in transaction costs.
Federal Data had revenue of $584 million in 1999. Customers include the National Institutes of Health, Department of Veterans Affairs, the Federal Aviation Administration, NASA and the Internal Revenue Service.
“The acquisition of Federal Data is an excellent strategic fit with Logicon, our information technology sector, which is one of the company’s key engines of growth,” Kresa said in a statement.
Based in Bethesda, Md., Federal Data is owned by the private investment firm Carlyle Group and has about 1,400 employees.
In July, Northrop sold its commercial aerostructures division, which makes fuselages and other parts, to Carlyle Group for $843 million. Northrop has been looking to shed that division, and Carlyle has ownership stakes in several aerospace and defense companies.
Northrop has said it wants to focus on its defense lines, which include electronic warfare gear, information systems, radar systems and sensors. The company also is winding up production of the B-2 Stealth bomber, which it builds in Palmdale. It also builds a big portion of the F/A-18 fighter jet in El Segundo, where it has about 2,500 workers.
Its Logicon division, which had $1.5 billion in revenue last year, is based in Herndon, Va. The company’s products include military command and control systems, training simulation gear and commercial information services.
The Federal Data deal is expected to close within 45 days, Northrop said in a statement.
Northrop shares fell 13 cents to close at $79.94 on the New York Stock Exchange.
