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Booz Allen (BAH) to Gain From Tracepoint Buyout: Here's How

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Booz Allen Hamilton (BAH - Free Report) recently announced that it has completed the purchase of Tracepoint, a digital forensics and incident response ("DFIR") company serving public and private sector clients.

Post its initial strategic investment in Tracepoint, which Booz Allen made in January 2021, it put to use its option to buy out the former's business completely. Financial terms of the deal have been kept under wraps.

Over the past year, shares of Booz Allen have declined 5% against 2.8% growth of the industry it belongs to.

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How Will Booz Allen Benefit?

Booz Allen plans to integrate Tracepoint with its Commercial Cyber business in early 2022. This is a part of its long-term growth strategy to expand business in three key areas: incident response, enterprise consulting and managed services.

The integration is expected to help Booz Allen offer enhanced cyber services and solutions. Tracepoint’s DFIR capabilities and extensive customer relationships should complement and boost Booz Allen’s existing commercial portfolio, and also strengthen its position in the private sector cyber market.

Bill Phelps, executive vice president and leader of Booz Allen’s commercial business, stated, "Tracepoint has an exceptionally qualified team with strong brand recognition in the DFIR market and extensive relationships in its core sectors to expand our commercial offering and accelerate our growth.” 

Considering the increasing pace at which organizations and governments around the globe are facing cyber threats, the latest deal seems to be a strategic move on Booz Allen’s part to enhance its incident response capabilities.

Zacks Rank and Stocks to Consider

Booz Allen currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Some better-ranked stocks in the broader Zacks Business Services sector are Equifax (EFX - Free Report) , BGSF Inc. (BGSF - Free Report) and Avis Budget (CAR - Free Report) , each carrying a Zacks Rank #2 (Buy).

The long-term expected EPS (three to five years) growth rate for Equifax, BGSF and Avis Budget is pegged at 15.2%, 20% and 57.2%, respectively.