Veritas Capital on Monday said it has completed its $3.4 billion acquisition of Northrop Grumman
’s [NOC] government information technology (IT) services business, which will be combined with its portfolio company Peraton to make it a top-tier federal technology and services company.
Northrop Grumman said it expects to use the sale proceeds mainly to repurchase shares to offset dilution from the transaction and for debt retirement.
Northrop Grumman on Monday said it has entered into an accelerated share repurchase agreement with Goldman Sachs & Co. to repurchase $2 billion shares of Northrop Grumman’s common stock. The company expects to receive about 85 percent of the share repurchases on Tuesday and the rest of the stock repurchases are expected to be completed in the second quarter of 2021.
In a separate announcement on Monday, Northrop Grumman said it plans to redeem $1. 5 billion of its debt early, which will result in a $55 million pre-tax charge in the first quarter of 2021.
The Northrop Grumman IT business had about $2.3 billion in sales last year.
“Together we will position Peraton to deliver an unrivaled range of trusted technology capabilities and solutions to support customers’ missions of consequence across the intelligence community, Department of Defense, federal civil and health agencies, and state and local governments,” Stu Shea, chairman, president and CEO of Peraton, said in a statement.
Veritas last week also agreed to acquire federal services provider Perspecta [PRSP] in a $7.1 billion deal that will also be combined with Peraton. That transaction is expected to close in the first half of 2021. Perspecta is forecasting sales between $3.7 billion and $4.6 billion for its fiscal year that ends in October.