KBR, Inc. [KBR] on Tuesday said it has completed its $570 million cash acquisition of Wyle, Inc., a deal that more than doubles its government services business and shift toward less reliance on the hydrocarbon market.
KBR’s government services business had $663 million in sales last year and with Wyle in the fold, annual revenue will be about $1.5 billion. KBR had $5.1 billion in sales in 2015.
With the acquisition, KBR has rebranded its Wyle as KBRwyle.
“KBRwyle fits perfectly with our strategy to expand KBR’s global government services offerings, moving the business towards the high growth, more specialized, technology and science-driven sources of long-term annuity type revenues with greater differentiation and higher margins,” Stuart Bradie, president and CEO of KBR, said in a statement. “As our government services markets expand, we are seeing increasing synergy with our hydrocarbons business, with people and services moving between divisions, further enhancing the value proposition of the acquisition.”
KBRwyle will be a business unit within KBR’s Government Services segment. KBR said Wyle’s management team will continue in their current capacities.
Wyle’s backlog at the end of 2015 was $1.5 billion with $440 million funded.
Wyle’s primary customers are the Army, Navy and NASA, with each accounting for more than 20 percent of sales, followed by the Air Force, Defense Department, and joint command programs.
KBR’s government services business does work for Britain, Australia, and the United States military providing base operations services overseas. KBR’s government services business relies on war-related funding through the Pentagon’s Overseas Contingency Operations account.