Leidos has completed the acquisition of L3Harris Technologies’ Security Detection and Automation businesses, for approximately $1 billion in cash.
The acquired businesses provide airport and critical infrastructure screening products, automated tray return systems and other industrial automation products. They will operate within the Leidos Civil Group, led by Jim Moos, Civil Group president.
Combined with Leidos’ existing cargo and baggage screening product lines, Leidos now goes to market with a global security detection and automation footprint of more than 24,000 systems deployed in more than 120 countries. Leidos will continue to serve global customers in the aviation, transportation, government and critical infrastructure markets.
“This deal expands our scope and scale in securing ports and borders, enhancing passenger movement in airports of the future, and fortifying infrastructure for national security and public venues,” said Moos. “We are pleased to welcome more than 1,200 L3Harris employees around the world to the Leidos team, who share our deep commitment of providing our customers with a fully-integrated security technology ecosystem.”
The closing of this acquisition creates a comprehensive and cohesive security detection platform by adding technologies including checkpoint CT scanners, people scanners, explosives trace detectors, checked baggage screeners, and automated tray return systems (ATRS) to Leidos’ security detection portfolio.
The combined business expands customer penetration across aviation, ports, borders, and critical infrastructure internationally and increases Leidos’ international security products revenue more than six-fold. The deal brings Leidos products into 75 additional countries.
The transaction is expected to be immediately accretive to Leidos’ revenue growth, EBITDA margins, and non-GAAP diluted earnings per share upon closing. Cash consideration of approximately $1.0 billion plus related transaction costs was funded through a combination of excess cash on hand and a two-year term loan.
Leidos retained Credit Suisse Securities (USA) LLC as financial advisor, and Fried, Frank, Harris, Shriver, & Jacobson LLP and DLA Piper as legal advisors in connection with the transaction.