Network solutions provider LGS Innovations has a new owner.
Investor group Madison Dearborn and CoVant agreed to buy the company from French global communications firm Alcatel-Lucent, according to an announcement Friday. The deal is worth up to $200 million. Half of that total will be paid once the transaction is closed sometime in the first quarter of 2014. The remaining balance is contingent on LGS Innovations’ performance in fiscal 2014.
All of the company’s nearly 700 employees, management and business structures will remain intact during the transition.
CEO Kevin Kelly expects the change in ownership from a foreign company to a U.S. company will make LGS Innovations more competitive.
“One obvious relaxation we get is when business is awarded to foreign-owned entities, often times government has to do national interest determinations” or NIDs, Kelly said. NIDs are made in cases where the government is considering releasing top secret, sensitive communications security and restricted data and other information to foreign-owned or controlled companies.
It’s an extra step that gives the government an opportunity to reevaluate other companies, Kelly said.
LGS Innovations was formed during the Alcatel and Lucent merger in 2006 as an independent subsidiary and sole channel to the federal government, with a focus on secure communications and networking solutions, advanced research and development in photonics, remote sensing, microtechnology and cybersecurity.
The company holds several government contracts, including a spot on the Army’s five-year, $4.1 billion Communications and Transmission Systems (CTS) contract and a $250,000 contract to design a next-generation, highly integrated photonic source for the Air Force Research Labs. The company’s research is focused on potential advancements in laser technology.