Leidos [LDOS] on Thursday said it has agreed to acquire 1901 Group, a provider of managed information technology (IT) services and cloud solutions to the private and public sectors, for $215 million in cash.

The deal, which is expected to close during the first quarter of 2021, has been approved by both companies’ board and is subject to regulatory approval.

1901 Group, which has more than 400 employees and is based in Northern Virginia, provides cloud, cyber security, enterprise-scale digital modernization services and capabilities to improve performance and reduce costs, Leidos said. The company’s solutions can be implemented using a variety of business models including as managed services to on-premise support or a hybrid of the two.

Leidos said the pending acquisition will further its position in the digital modernization market and better allow it to address the “accelerating cloud and IT services markets” to meet “growing customer demand for more fixed-price, utility-based business arrangements.”

“Leidos and 1901 Group both strive to provide customers with progressive, agile and secure solutions,” Roger Krone, chairman and CEO of Leidos, said in a statement. “Together, we will be better positioned to continue successfully providing these critical solutions while navigating growing trends in the IT marketplace.”

1901 Group will become part of Leidos’ Defense Group.

“The opportunities this acquisition will unlock by combining our enterprise IT operations centers and secure FedRAMP platform with the unmatched depth and scale of Leidos sets us up for great success,” Sonu Singh, founder and CEO of 1901 Group, said in a statement.

1901 Group’s financial adviser on the deal is Baird.