Peraton to Pay $3.4 Billion in Cash

Northrop Grumman is selling its federal IT and mission support business to Peraton, an affiliate of Veritas Capital, for $3.4 billion (€2.8 billion) in cash. The transaction is expected to close in the first half of 2021, subject to regulatory approvals and customary closing conditions. The business is expected to generate approx. $2.3 billion in 2020 revenues.

“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,” commented Kathy Warden, company Chairman, CEO and President. “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, which provides mission-critical technology solutions to government customers.