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Leidos (LDOS) Signs Agreement to Acquire 1901 Group for $215M
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Leidos Holdings, Inc. (LDOS - Free Report) recently signed an agreement to buy 1901 Group, a leading information technology services and cloud solutions provider, for $215 million in cash. The acquisition is projected to conclude in the first quarter of 2021, subject to customary closing conditions and regulatory approvals.
Rationale Behind the Acquisition Deal
In recent times, rising focus on cost-reduction initiatives, widespread competition and the desire for increased control over production procedures have prompted players from the defense industry to engage in strategic mergers and acquisitions. Such transactions have increasingly gained importance, which enables companies to achieve desired growth by expanding operations, having access to new capabilities and emerging technologies, ultimately leading to enhanced quality of products and services and capturing increased shares in growing markets.
How Will the Merger Benefit Leidos?
The integration of 1901 Group into Leidos’ portfolio will undoubtedly enhance the latter’s position in the digital modernization market and expand its ability to address the accelerating cloud and IT services markets. Notably, this will be instrumental for Leidos in addressing growing customer demand for cloud-based solutions in the defense market and for acquiring more fixed-priced, utility-based business arrangements.
Also, 1901 Group has expertise in delivering leading cloud, cybersecurity and enterprise-scale digital modernization services and capabilities to the federal marketplace, which improve performance and reduce costs. Therefore, its inclusion will provide Leidos with substantial new capabilities, which will expand the acquirer’s customer base and boost its profitability.
Other Acquisitions Boosting Defense Space
This year has witnessed quite a few major mergers and acquisitions within the U.S. defense space, irrespective of the global volatile market conditions caused by impact from the Covid-19 pandemic. Let’s have a look at few such acquisitions which took place this year.
In April 2020, Raytheon merged with United Technologies to create Raytheon Technologies (RTX - Free Report) , which was approximately worth $121 billion. Toward the end of July, BAE Systems (BAESY - Free Report) completed the acquisition of the Collins Aerospace Military Global Positioning System (GPS) business from Raytheon Technologies.
In August, Heico Corp. (HEI - Free Report) acquired Intelligent Devices, Inc. and Transformational Security, LLC.
Price Movement & Zacks Rank
In a year’s time, shares of Leidos have gained 14.9% agaisnt the industry’s 25.2% decline.
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Leidos (LDOS) Signs Agreement to Acquire 1901 Group for $215M
Leidos Holdings, Inc. (LDOS - Free Report) recently signed an agreement to buy 1901 Group, a leading information technology services and cloud solutions provider, for $215 million in cash. The acquisition is projected to conclude in the first quarter of 2021, subject to customary closing conditions and regulatory approvals.
Rationale Behind the Acquisition Deal
In recent times, rising focus on cost-reduction initiatives, widespread competition and the desire for increased control over production procedures have prompted players from the defense industry to engage in strategic mergers and acquisitions. Such transactions have increasingly gained importance, which enables companies to achieve desired growth by expanding operations, having access to new capabilities and emerging technologies, ultimately leading to enhanced quality of products and services and capturing increased shares in growing markets.
How Will the Merger Benefit Leidos?
The integration of 1901 Group into Leidos’ portfolio will undoubtedly enhance the latter’s position in the digital modernization market and expand its ability to address the accelerating cloud and IT services markets. Notably, this will be instrumental for Leidos in addressing growing customer demand for cloud-based solutions in the defense market and for acquiring more fixed-priced, utility-based business arrangements.
Also, 1901 Group has expertise in delivering leading cloud, cybersecurity and enterprise-scale digital modernization services and capabilities to the federal marketplace, which improve performance and reduce costs. Therefore, its inclusion will provide Leidos with substantial new capabilities, which will expand the acquirer’s customer base and boost its profitability.
Other Acquisitions Boosting Defense Space
This year has witnessed quite a few major mergers and acquisitions within the U.S. defense space, irrespective of the global volatile market conditions caused by impact from the Covid-19 pandemic. Let’s have a look at few such acquisitions which took place this year.
In April 2020, Raytheon merged with United Technologies to create Raytheon Technologies (RTX - Free Report) , which was approximately worth $121 billion. Toward the end of July, BAE Systems (BAESY - Free Report) completed the acquisition of the Collins Aerospace Military Global Positioning System (GPS) business from Raytheon Technologies.
In August, Heico Corp. (HEI - Free Report) acquired Intelligent Devices, Inc. and Transformational Security, LLC.
Price Movement & Zacks Rank
In a year’s time, shares of Leidos have gained 14.9% agaisnt the industry’s 25.2% decline.
Leidos currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Ignited by referendums and legislation, this industry is expected to blast from an already robust $17.7 billion in 2019 to a staggering $73.6 billion by 2027. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot stocks we're targeting >>