Leidos to Acquire Entrust Solutions Group for $2.4 Billion

By Chris Stiles • Monday, January 26 16:41 • Permanent Link

Leidos, a prominent engineering solutions provider, has just disclosed its definitive agreement to acquire Entrust Solutions Group from Kohlberg for approximately $2.4 billion. This acquisition is poised to significantly amplify Leidos' standing as a leading player in the utilities sector. Notably, the purchase will effectively double the size of Leidos' $600 million energy infrastructure engineering business, which has been achieving double-digit growth and margins over the past eight years.

The acquisition of Entrust Solutions Group is projected to be immediately accretive to Leidos' revenue growth and EBITDA margin. Furthermore, it is anticipated to be accretive to non-GAAP diluted earnings per share in 2027. Leidos intends to finance the all-cash transaction through a combination of new debt, cash on hand, and commercial paper.

The transaction is expected to be finalized by the end of the second quarter of 2026, subject to customary closing conditions and regulatory approvals. Leidos has engaged Citi as its financial advisor, Davis Polk & Wardwell LLP as legal advisor, and PwC as accounting advisor for this transaction.

This strategic move aligns with Leidos' NorthStar 2030 growth strategy, focusing on engineering and technology for secure energy infrastructure. With utilities projected to invest $1 trillion over the next decade in modernization efforts, this acquisition positions Leidos to capitalize on the growing demands for power and the national imperative to fortify the U.S. electrical grid.

In the fiscal year ended January 3, 2025, Leidos reported annual revenues of approximately $16.7 billion, reflecting its significant presence and scale in the industry. On the other hand, Entrust Solutions Group comprises over 3,100 professionals across 40+ locations in North America, providing comprehensive engineering, consulting, design, asset integrity, data solutions, and automation services to utilities, operators, and industrial customers.

This acquisition underscores Leidos' commitment to expanding its presence and capabilities in the energy infrastructure market, leveraging Entrust Solutions Group's expertise and customer base to drive innovation and address the complex challenges facing the utility and power markets today. As a result of these announcements, the company's shares have moved 0.69% on the market, and are now trading at a price of $194.70. For more information, read the company's full 8-K submission here.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.