Lockheed Martin Agrees to Acquire ACS Federal Government Units and Sell its Commercial IT Unit
BETHESDA, MD, 01-AUG-03 -- Lockheed Martin (NYSE: LMT) announced today that it entered into definitive agreements to acquire ACS' (NYSE: ACS) federal government information technology (IT) business. Concurrently, ACS will acquire Lockheed Martin's commercial IT business. The agreements have been approved by the boards of directors of both companies. Net cash consideration to ACS will be $551 million. The transactions are expected to be accretive upon closing to Lockheed Martin. The acquisition of the ACS federal business expands Lockheed Martin's capabilities in business process outsourcing and managed services, enhancing its ability to support civil and defense government agencies. Lockheed Martin's federal IT business customers include the Departments of Defense, Interior, Labor and Veterans Affairs, the U.S. Congress and various intelligence agencies.
The divestiture of Lockheed Martin's commercial IT unit represents the latest action by the corporation to focus its portfolio on core customers and markets.
Revenues from ACS' divested federal business were approximately $700 million for the year ended June 30, 2003. Lockheed Martin's sales for its divested commercial IT business in 2002 were approximately $300 million.
The transaction affects multiple units of ACS, including civilian and defense components of the ACS Government Services organization. ACS' state and local government business is not included in the transaction. Approximately 5800 ACS employees will join Lockheed Martin as result of the transaction. Approximately 1000 Lockheed Martin employees will join ACS.
Vance Coffman, Chairman and Chief Executive Officer of Lockheed Martin, said, These transactions represent a positive step in the execution of our disciplined growth strategy and reinforce the focus on our core businesses. It is clearly a real benefit to both Lockheed Martin and ACS as we achieve better alignment of our business portfolios. We are very happy to welcome employees of ACS as we expand our service offerings to our Department of Defense, intelligence and civil agency customers. We'd also like to thank our commercial IT employees for their valued service to Lockheed Martin and wish them well as they join the exciting ACS team.
This is a terrific win-win transaction for both companies, said Jeff Rich, Chief Executive Officer of ACS. Lockheed Martin is a premier player in the federal market and ACS is a premier player in the commercial market.
These transactions are subject to normal government approvals, including review under the Hart-Scott-Rodino Antitrust Improvements Act and satisfaction of other customary closing conditions. Each transaction is also conditional on the other transaction closing. It is expected that the transactions will close in the fourth quarter of 2003.
ACS is a Fortune 500 company with more than 40,000 employees supporting operations in nearly 100 countries and provides business process and information technology outsourcing solutions to world-class commercial clients.
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