SAIC to Buy Unisys Federal in $1.2B Deal

Technology integrator Science Applications International Corp. has agreed to acquire Unisys Federal for $1.2 billion in a move that adds intellectual property and technology-enabled solutions while expanding customer reach, company leaders said Feb. 6.

The transaction, which SAIC recognizes as highly strategic and value creating, intends to create a leading digital transformation services and solutions provider to the government, SAIC CEO Nazzic Keene said. Unisys Federal operates under Unisys, and provides infrastructure modernization, cloud migration, managed services and enterprise IT-as-a-service solutions to federal civilian agencies and the Defense Department.

Nazzic Keene, SAIC

“This exciting opportunity advances our strategy by building on our modernization capabilities, increasing customer access, accelerating growth and enhancing shareholder value,” Keene said. “The financial benefits of acquiring Unisys Federal are compelling, including accretion of adjusted EBITDA margins, non-GAAP earnings per share, and cash generation.”

Additional strategic and financial benefits of the deal include enhanced capabilities in IT modernization, cloud migration, managed services and DevSecOps. It also entails an expansion of SAIC’s portfolio of intellectual property and technology offerings. As a result, the move will expand access to current and new customers with a strengthened pipeline of new business opportunities, increasing shareholder value with an attractive financial profile, SAIC said.

“We’re super excited around the alignment of our solution and the solutions that Unisys Federal is bringing, specifically in three categories around cloud, around IT managed services, around software and development, specifically DevSecOps,” Josh Jackson, SAIC executive vice president and general manager of the Solutions & Technology Group, said on a Feb. 6 media call about the acquisition.

Josh Jackson, SAIC

Those three areas combined create a leadership position in the broader market of IT modernization, he added.

“We have a very deep and wide comprehensive solution that we can offer our customers to help them navigate the entire modernization journey,” Jackson said. “We’re excited about many things, but most excited about the complementary nature of our solutions.”

And considering the modernization and digital transformation journey for government customers isn’t just about technology, Jackson said he’s excited about the holistic approach the acquisition will provide.

“Transformation is not just about inserting technology, but it’s about having people that understand the mission of those customers intimately, and translating and applying technology to support those missions,” he added.

Ultimately, the acquisition will allow SAIC to deploy technology-enabled, IP-based solutions through a commercial-like service delivery model. With Unisys Federal, SAIC will boast more than 25,000 employees, $7.1 billion in revenue (based on 12 months’ revenue as of SAIC’s fiscal year 2020 third quarter and Unisys Federal’s fiscal year 2019 third quarter), and 7,200 certifications/accreditations.

The acquisition follows SAIC’s efforts over the last few years to expand its presence through M&A in the intel community, in space and in customer prioritization of IT modernization and digital transformation, Keene said on the media call.

“Unisys Federal brings great competencies that we can marry with those that we have inside of SAIC and some of the success that they’ve had these last few years, and really working close with customers, their commercial infusion of how the go-to-market, how they deliver, will add tremendous strengths to SAIC,” she added.

The transaction is expected to close by the end of SAIC’s first quarter of fiscal year 2021, ending May 1, 2020. SAIC expects to fund the $1.2 billion cash transaction through cash on hand and incremental debt.

Keene, who took the helm at SAIC in 2019, was named to WashingtonExec’s Top 25 Execs to Watch in 2020.

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