Northrop Grumman to Sell Federal IT and Mission Support Business to Veritas Capital for $3.4 Billion
December 07 2020 - 6:00PM
Northrop Grumman Corporation (NYSE: NOC) and Veritas Capital, today
announced that Peraton, an affiliate of Veritas, has signed a
definitive agreement to acquire Northrop Grumman’s federal IT and
mission support services business for $3.4 billion in cash. The
transaction is expected to close in the first half of 2021, subject
to regulatory approvals and customary closing conditions.
In 2020, this Northrop Grumman business, in aggregate, is
expected to generate approximately $2.3 billion in revenue.
“This divesture allows us to drive value and reflects our
strategy of focus on growing core businesses where technology and
innovation are the key differentiators,” said Kathy Warden,
chairman, chief executive officer and president, Northrop Grumman.
“We expect to create compelling value to our shareholders through
this transaction and execution of our capital allocation
strategy.”
Northrop Grumman expects to use the sale proceeds primarily for
share repurchases, to offset dilution from the transaction, and for
debt retirement.
On closing, Veritas expects to combine the Northrop Grumman
business with Peraton, a Veritas portfolio company that provides
mission critical technology solutions to government customers.
Northrop Grumman solves the toughest problems in space,
aeronautics, defense and cyberspace to meet the ever evolving needs
of our customers worldwide. Our 90,000 employees define possible
every day using science, technology and engineering to create and
deliver advanced systems, products and services.
Cautionary Statement Regarding Forward-Looking
Statements
Statements in this press release contain or may contain
statements that constitute “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.
Words such as “will,” “expect,” “anticipate,” “intend,” “may,”
“could,” “should,” “plan,” “project,” “forecast,” “believe,”
“estimate,” “guidance,” “outlook,” “trends,” “goals” and similar
expressions generally identify these forward-looking statements.
Forward-looking statements include, among other things, statements
relating to the future financial condition and results of
operations of the federal IT and mission support services business,
expected benefits of the proposed sale of the business and the
timing of the proposed sale. Forward-looking statements are based
upon assumptions, expectations, plans and projections that we
believe to be reasonable when made, but which may change over time.
These statements are not guarantees of future performance and
inherently involve a wide range of risks and uncertainties that are
difficult to predict. Specific risks that could cause actual
results to differ materially from those expressed or implied in
these forward-looking statements include, but are not limited to:
those identified and discussed more fully in the section entitled
“Risk Factors” in the Form 10-K for the year ended December 31,
2019, the section entitled “Risk Factors” in the Form 10-Q for the
quarter ended March 31, 2020 and from time to time in our other
filings with the Securities and Exchange Commission; the
possibility that the conditions to closing the proposed sale may
not be satisfied on a timely basis, or at all; the risk that the
proposed sale may not achieve the expected benefits or that the
sale proceeds will not be used for their intended purposes; the
possibility of business disruption during the pendency of or
following the proposed sale; the risk that management time may be
diverted on sale-related issues; the reaction of customers and
other third parties to the proposed sale and related transactions
and post-closing arrangements; and other events or circumstances
that could adversely impact the completion of the proposed sale and
related transactions, including the ongoing COVID-19 pandemic and
other industry, political or economic conditions outside of our
control. You are urged to consider the limitations on, and
risks associated with, forward-looking statements and not unduly
rely on the accuracy of forward-looking statements. These
forward-looking statements speak only as of the date when made, and
the Company undertakes no obligation to publicly update or revise
any forward-looking statements, whether as a result of new
information, future events or otherwise, except as required by
applicable law.
Contact: |
Tim Paynter
(Media) |
|
703-280-2720 (office) |
|
timothy.paynter@ngc.com |
|
|
|
Todd Ernst (Investors) |
|
703-280-4535 (office) |
|
todd.ernst@ngc.com |
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