Further building out its footprint and capabilities in Australia, Leidos [LDOS] on Tuesday said it has agreed to acquire an airborne surveillance and search and rescue business based in Australia that is currently part of Britain’s Cobham Limited.
Leidos will pay $215 million for Cobham Aviation Services Australia’s Special Mission business, which has about 380 employees. The deal is expected to close this year and is subject to regulatory approvals.
The Special Mission business owns and operates 14 modified aircraft that provide outsourced civil maritime surveillance operations to the Australian Border Force in the country’s Exclusive Economic Zone, fixed-wing search-and-rescue over land and sea for the Australian Maritime Safety Authority, and specialized mission aircrew training.
“This acquisition diversifies our Australian portfolio into capability and mission services work with both the defense maritime and homeland affairs programs,” Roger Krone, chairman and CEO of Leidos, said during the company’s second quarter earnings call on Tuesday. “Finally, integration risk is manageable because airborne surveillance is what we know how to do well and we already have strong local leadership and infrastructure to support success.”
Leidos Australia has four lines of business including IT Projects, Intelligence, Defense Mission Systems and IT Services. The company’s website says it has more than 1,400 “local experts” that make up the organization in Australia.
In a statement, Krone also said that the acquisition “will expand the scope of our global airborne ISR capabilities, diversify revenues, and open up new growth avenues.”
Krone said once the acquisition is completed, it will immediately be accretive to adjusted earnings.
Cobham is a portfolio company of the private equity firm Advent International. Cobham’s financial adviser on the deal is Macquarie and Leidos is being advised by PricewaterhouseCoopers.