Leidos Holdings Inc. (NYSE: LDOS) jumped back into the mergers and acquisition market late Thursday, acquiring 1901 Group in a $215 million cash on hand deal.
The deal would shift the Reston-based managed information technology services and cloud solutions provider into Leidos’ defense business segment, providing its customers with enhanced cloud, cybersecurity and enterprise-scale digital modernization capabilities.
1901 Group formed in 2009, when CEO-founder Sonu Singh decided to offer government agencies cloud-backed IT services as a way to help infuse more innovation into their enterprise technology budget rather than expend it on propping up legacy technology.
Demand for those services have surged over the past decade as both the Obama and Trump administrations have focused their technology modernization and digital transformation strategies on infusing cloud computing into federal agency operations.
The company’s clients have included departments of Justice, Agriculture, Education and Health and Human Services, as well as the Small Business Administration, the U.S. Army, the U.S. Access Board and Centers for Medicare and Medicaid Services. It also has a spot on the General Services Administration’s Alliant Small Business and IT Schedule 70 contract vehicles.
In addition to 1901’s Reston headquarters, it maintains an Enterprise IT Operations Center near Blacksburg and invested $4 million in 2018 to expand new 800 job roles in its corporate and Montgomery County, Virginia offices by 2021. Chevy Chase-based government technology investment firm Enlightenment Capital invested in the company in 2017.
The acquisition is expected to close in the first quarter of 2021 and marks Reston-based Leidos’ second purchase since February’s $1 billion buy of L3Harris Technologies’ (NYSE: LHX) security a detection systems and automation businesses.
Holland & Knight, LLP served as legal advisor to Leidos. Pillsbury Winthrop Shaw Pittman LLP served as legal advisor to 1901 Group with Baird serving as financial advisor to 1901 Group.