WASHINGTON — Booz Allen Hamilton wrapped its $440 million purchase of fellow defense company EverWatch, following a federal judge’s decision not to intervene on antitrust grounds.
Booz Allen announced the finalized deal Oct. 14, roughly a half-year after the prospective merger was first publicized.
“EverWatch’s talented workforce, national security expertise, and core technical capabilities are an exceptional strategic fit with Booz Allen’s deep mission insights and robust portfolio of full-spectrum cyber operations, mission analytics, AI, and 5G offerings,” Tom Pfeifer, Booz Allen’s national security sector president, said in a statement. “The combination will deliver tremendous value to our clients as we work together to navigate a dynamic threat landscape and transform U.S. national cyber capabilities.”
EverWatch, a supplier of artificial intelligence, cloud services and insider-threat analysis, will initially operate as a subsidiary of Booz Allen, the 22nd largest defense contractor by revenue, according to the latest Defense News rankings.
John Hillen, EverWatch’s CEO, in a statement said his team was “excited to join Booz Allen” and looked forward “to working together to deliver exceptional support to clients in the intelligence community and beyond.”
The Justice Department in June sued to stop Booz Allen from acquiring EverWatch, alleging the merger was anticompetitive. In its complaint, the government argued the combination would harm taxpayers and cripple services provided to the National Security Agency under a multi-year signals intelligence and simulation contract known as Optimal Decision.
Booz Allen and EverWatch were thought to be the only two serious bidders for Optimal Decision, which is valued at $150 million, according to court records. The NSA issued a request for proposals for the contract in mid-September.
U.S. District Judge Catherine Blake on Oct. 11 killed the Justice Department’s request for preliminary injunction — a green light for Booz Allen to quickly complete its takeover. The government’s counsel has since sought a two-week injunction suspending the merger while an appeal is mulled.
Booz Allen previously told the court its purchase of a “struggling” EverWatch would stimulate defense industry competition and better position it to challenge larger, more-dominant players, such as Lockheed Martin and Raytheon Technologies.
The company also said the revenue generated by Optimal Decision pales in comparison to its ultimate goals.
Colin Demarest is a reporter at C4ISRNET, where he covers military networks, cyber and IT. Colin previously covered the Department of Energy and its National Nuclear Security Administration — namely Cold War cleanup and nuclear weapons development — for a daily newspaper in South Carolina. Colin is also an award-winning photographer.