The transaction is valued at $302 million, including approximately $127 million in cash, $157 million in debt (which will be retired in conjunction with the
closing) and $18 million in other transaction costs. The acquisition is expected
to be neutral to Northrop Grumman earnings in 2000 and accretive to earnings in
2001 and beyond.
Federal Data, with 1999 revenues of $584 million, is a leading provider of a
full range of innovative IT solutions which meet the unique and rapidly growing
requirements of the federal civil marketplace. Major customers include the
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National Institutes of Health, Veterans Administration, the FAA, NASA, the
Internal Revenue Service and the Department of State. The Department of Defense is also a customer.
The acquisition of Federal Data is an excellent strategic fit with Logicon, our
information technology sector, which is one of the company’s key engines of
growth, stated Kent Kresa, Northrop Grumman chairman, president and chief
executive officer. Federal Data’s strong brand recognition and expertise in the
federal systems integration business enhances Logicon’s thrust into high-end
professional IT services and support. Coupled with our recent acquisition of
Comptek Research, we continue to acquire businesses with significant growth
prospects which we believe will provide long-term value for our shareholders.
Based in Bethesda, Md., Federal Data is owned by The Carlyle Group, a private
investment firm, and has approximately 1,400 employees in the Washington, D.C.,
area and throughout the U.S. Following the close of the transaction, Federal
Data will be integrated into the operations of Logicon.
Federal Data is a key provider of professional software services and solutions,
ranging from high-end systems integration, to network management and
outsourcing. In late 1999, the company was awarded an eight-year, $260 million
NASA contract, under which it will develop, build and operate microgravity research facilities and payloads for Space Shuttle missions and the International Space Station. The Veterans Administration has just awarded Federal Data a $55 million contract extension to provide continuing IT supportfor its benefits modernization program. Also, Federal Data is the largest supplier of Cisco Systems hardware to the Federal government.
