Leidos signs deal to acquire Dynetics for $1.65bn

18 December 2019 (Last Updated December 18th, 2019 10:22)

Leidos has signed an agreement to buy Dynetics for $1.65bn to acquire new capabilities in growth areas such as hypersonics, weapons, and space technologies.

Leidos signs deal to acquire Dynetics for $1.65bn
Dynetics and its partners are building the army’s laser weapon system demonstrator. Credit: Lockheed Martin.

Leidos has signed an agreement to buy Dynetics for $1.65bn to acquire new capabilities in growth areas such as hypersonics, weapons, and space technologies.

The acquisition is expected to add product offerings to Leidos’ portfolio and bring new opportunities to support the growth of the company’s innovations centre research and development division.

Based in Huntsville, Alabama, US, Dynetics is an applied science and information technology company that serves the Pentagon, Nasa and other customers in the intelligence community.

Leidos is eyeing growth opportunities in small glide munitions, directed energy, and hypersonics segments that the transaction will present. The programmes will boost the company’s defence portfolio.

The transaction will also expand Leidos’ capabilities in agile manufacturing, rapid prototyping and systems integration.

The company hopes to leverage Dynetics’ expertise in developing prototypes for defence systems such as air vehicles, radars, weapons, counter-unmanned aircraft systems (c-UAS).

Another key feature of the proposed deal is the more than 350,000ft² of production space Leidos will acquire from Dynetics. The facility will allow the firm to pursue the development of innovations from concept stage to production.

Other benefits of the transaction include expansion of the company’s presence in Huntsville and extending relationships with the US Army, Defense Advanced Research Projects Agency (DARPA), Defense Intelligence Agency (DIA), and US Army Rapid Capabilities and Critical Technologies Office.

Leidos chairman and CEO Roger Krone said: “Dynetics is an innovative company with a talented team that will deepen our identity as a national security systems provider and enhance our platform to deliver sustainable, profitable growth.

“The addition of Dynetics will significantly increase our capabilities for rapid prototyping and agile system integration and production, enhancing our overall offerings and services to customers.”

Subject to closing conditions, the acquisition is expected to be completed in the first quarter of next year.

In September, Dynetics was contracted by the US Army to produce Common-Hypersonic Glide Body (C-HGB) prototypes.

The company is also supporting the army’s High Energy Laser Tactical Vehicle Demonstrator (HEL TVD) programme.