GovCon

SAIC looks to balance its government portfolio with Unisys Federal buy

Technology integrator SAIC announced Feb. 6 that the company intends to acquire Unisys Federal for $1.2 billion as part of its expansion of capabilities in defense and civilian government contracting.

“The acquisition of Unisys Federal positions us to be the leading digital transformation provider for the U.S. government,” said SAIC CEO Nazzic Keene on a press call.

“If you look at our journey on the SAIC side the last few years, we’ve been communicating a strategy that is really focused in two or three key dimensions.”

Most prominent among those dimensions are the intelligence and space contracts, which Keene said would likely continue to expand in coming years.

Bob Genter, SAIC executive vice president and general manager of civilian markets, said that the acquisition would also help to balance out the areas where SAIC has been less prominent.

“We are currently a little bit underweight on the civilian side for SAIC, and this really balances that out,” he said. “It also provides a great roadmap for the enterprise IT side for DoD.”

SAIC currently ranks in the top half of Defense News’s list of the top 100 defense companies. Meanwhile, the company does not rank at all among the top 100 federal contractors for 2018, the most recent ranking released by the General Services Administration. While the former ranks on defense-specific revenue, the latter ranks on total value of government contract awards.

According to the SAIC news release on the acquisition, the company has prioritized IT modernization; cloud migration; managed services; and development, security and operations in its government portfolio. His acquisition is aimed at enhancing those priorities.

“The most exciting thing that we’ve found thus far is that our solutions are very complimentary in [cloud, IT managed services and software development] areas, specifically in cloud,” said Josh Jackson, SAIC EVP and general manager of solutions & technology.

The acquisition follows a recent series of expansions between SAIC and its former parent company Leidos, which currently stands as the largest government services contractor.

Leidos announced Feb. 4 plans to buy L3Harris’s airport security business for $1 billion. At the end of 2019 it also announced that it would procure defense technology firm Dynetics for $1.65 billion. The latter announcement came just months after SAIC had completed its $2.5 billion acquisition of Engility.

According to Keene, the rapid succession of acquisitions will have a direct impact on the transition with Unisys Federal.

“It wasn’t that long ago that we did the Engility acquisition and integration, and it was very successful. So we have people with good pattern recognition,” said Keene.

The transaction is expected to close in the first quarter of fiscal year 2021, according to the news release.

SAIC is no stranger to government shutdowns, as they were spun off during the last major one in 2013. Now, during the longest in American history, they've finalized their acquisition of Engility. Get the details from company leadership about what's next for the defense industry giant.
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