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Leidos (LDOS) Buys 1901 Group for $215M, Expands IT Offerings

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Leidos Holdings, Inc. (LDOS - Free Report) recently completed the acquisition of 1901 Group, a leading information technology services and cloud solutions provider. The transaction value amounted to $215 million, in cash.

How Will the Acquisition 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 catering to the 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 computing techniques, cybersecurity, and enterprise-scale digital modernization services and capabilities to the federal marketplace, which will improve Leidos’ performance and reduce costs. Therefore, its inclusion will provide Leidos with substantial new capabilities, which will expand its customer base and boost profitability.

The acquisition further adds nearly 400 information technology, cloud and cyber specialists to the Leidos team. Undoubtedly, the addition will enhance Leidos’ deep bench of certified technical talent to support customers with their mission-critical needs.

Other Acquisitions Boosting Defense Space

A handful of mergers and acquisitions have taken place within the U.S. defense space in recent times, irrespective of the global volatile market conditions caused by the COVID-19 pandemic. Let’s have a look at a few such acquisitions, which took place over the past year and also the one’s expected to close in the upcoming months.

In April 2020, Raytheon merged with United Technologies to create Raytheon Technologies (RTX - Free Report) , which was approximately worth $121 billion.

In December 2020, Lockheed Martin (LMT - Free Report) agreed to acquire Aerojet Rocketdyne Holdings for approximately $5 billion, which is expected to close in the second half of 2021.

In January 2021, TransDigm Group Incorporated (TDG - Free Report) finalized the purchase of Cobham Aero Connectivity for approximately $965 million, in cash.

Price Movement & Zacks Rank

In the past six months, shares of Leidos have gained 20.9% compared with the industry’s 6.4% growth.


 
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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