Updated September 10, 2018
“RESTON, Va. & CHANTILLY, Va.–(BUSINESS WIRE)–Science Applications International Corp. (NYSE: SAIC) and Engility Holdings Inc., (NYSE: EGL) today announced that they have entered into a definitive agreement under which SAIC will acquire Engility in an all-stock transaction valued at $2.5 billion ($2.25 billion net of the present value of tax assets), creating the second largest independent technology integrator in government services with $6.5 billion of pro-forma last 12 months’ revenue.
The combination of these two complementary businesses will accelerate SAIC’s growth strategy into key markets, enhance its competitive position and provide significant financial benefits.
“The highly complementary portfolios, combined with our similar cultures, operating models, and histories, make this transaction a compelling combination that enhances the value proposition for our customers, employees, and shareholders,” said SAIC CEO Tony Moraco. “We look forward to welcoming the Engility team into SAIC, as together we create a market leader in government services with more than 23,000 employees.”
The transaction will create market sub-segment scale in strategic business areas of national interest, such as defense, federal civilian agencies, intelligence, and space. In addition, it expands the…” Source: SAIC.com.
G2X TAKE: While the sale of Engility had been widely rumored this past summer, the word out Monday morning that SAIC intends to acquire this CIO-SP3, OASIS, and Alliant 2 Prime, and longtime partner to numerous Federal Health agencies, for $2.5B made big news.
As we have previously noted, this deal was not driven by their Federal Health sector footprint. Having said that, due in large part to their prior acquisitions of HPTi and DRC, Engilty remains a considerable player in the Federal Health sector, with a significant set of Prime past experience at FDA and in support of the VA mission. The new combined health team for what will become ‘the second largest independent technology integrator in government services’ will be looking for opportunities to leverage their capabilities and set of past performance across the broader Federal Health sector. This group will be one to watch.
We should note that SAIC was recently rated by Healthcare Informatics as #18 on the list of the 100 vendors with the highest revenues derived from healthcare IT products and services earned in the U.S. based on revenue information from the previous year.
Added July 12, 2018
CIO-SP3 and Alliant 2 Prime, Engility is exploring a sale
“WASHINGTON (Reuters) – U.S. defense contractor Engility Holdings Inc (EGL.N) is exploring a sale, amid a wave of consolidation in the U.S. government services sector, three people familiar with the matter said on Wednesday….”
“… Engility has attracted interest from companies that include CACI International Inc (CACI.N) and Science Applications International Corp (SAIC) (SAIC.N), though deliberations are at an early stage…” Read the full article here.
Source: Exclusive: U.S. government contractor Engility explores sale: sources- By Mike Stone, July 11, 2018. Reuters.
G2X TAKE: This is still in early stage discussion, but the potential sale of Engility, a CIO-SP3, Alliant 2 and OASIS Prime contract holder and longtime partner to numerous Federal Health agencies with more than $2B in annual revenue is worth keeping an eye on.
While any deal here will not be driven by their Federal Health sector footprint, it is definitely worth noting that Engility, due in large part to their prior acquisitions of HPTi and DRC, remains a considerable player in the Federal Health sector, with a significant set of Prime past experience at FDA and in support of the VA mission.