Leidos has signed a definitive agreement to acquire ENTRUST Solutions Group from Kohlberg for approximately $2.4 billion, accelerating Leidos’ position as a leading engineering solutions provider for utilities nationwide.
The acquisition will add new capabilities and effectively double the size of Leidos’ $600 million energy infrastructure engineering business, which has grown on average at double-digit rates while delivering double-digit margins for the past eight years.
For more than two decades, Leidos has provided world-class engineering services for commercial electric utilities with a focus on transmission and distribution. ENTRUST’s engineering expertise extends from points of generation to transmission and distribution across the power delivery spectrum of both gas and electric utilities. Acquiring ENTRUST will broaden Leidos’ base of utility clients and strengthen its ability to drive innovation across a broader, more diverse set of utility customers.
“ENTRUST’s engineering capabilities and customer base perfectly complement ours, and it has a consistent track record of growth and strong profitability,” said Leidos Chief Executive Officer Tom Bell. “This deal is a bold step forward in support of Leidos’ growth strategy and a national priority to expand America’s energy infrastructure, while improving reliability and resilience against aging systems and extreme weather events.”
“By joining Leidos, we’re uniting world-class power and energy engineering expertise to create a leading end-to-end infrastructure platform,” said Adam Biggam, CEO at ENTRUST. “Our combined 5,500+ energy professionals will have the resources, technology and reach to tackle the most complex challenges facing the utility and power markets today.”
Engineering and technology for secure energy infrastructure is a strategic focus for Leidos under its NorthStar 2030 growth strategy. U.S. utilities are projected to invest $1 trillion over the next decade in a modernization surge to meet growing demands for power and a national priority to strengthen and secure the U.S. electrical grid.
The transaction is expected to be immediately accretive to Leidos’ revenue growth and adjusted EBITDA margin and accretive to non-GAAP diluted earnings per share in 2027.
Leidos expects to fund the all-cash $2.4B transaction through a combination of new debt, cash on hand and commercial paper.