Leidos to buy Gibbs & Cox

By Marjorie Censer / February 23, 2021 at 9:19 AM

Leidos said today it has agreed to pay $380 million to acquire naval engineering and design firm Gibbs & Cox.

The Arlington, VA-based Gibbs & Cox has 525 employees and is meant to add new capabilities and deepen customer relationships, Leidos said.

In a call with analysts this morning, Roger Krone, Leidos' chief executive, said the deal could help Leidos pursue autonomous maritime programs. He noted, for instance, Leidos did not win the Navy's Medium Unmanned Surface Vehicle program.

"There were things that we learned in naval architecture and ship design," he said. "We're very excited about how Gibbs & Cox brings their capability around the design of the ship and the ship systems and we bring, if you will, the mission equipment. And we're really excited about how that will fuel growth for our maritime business going forward."

In a statement, the company said the deal extends it "into an attractive maritime market where Leidos is under-penetrated today, and adds valuable engineering talent (naval architects and digital engineers) to the team."

"It further positions Leidos for long-term growth in the maritime unmanned market -- a market requiring tight integration of ship design and autonomy systems," Leidos added.

The acquisition is just the latest for the contractor, which has made a number of deals in recent years, including picking up Dynetics and L3Harris Technologies' security detection and automation business in 2020.

The transaction is expected to close by the end of June.

Meanwhile, Leidos said today sales in the most recent quarter in its defense solutions business totaled $1.9 billion, up almost 17% from the same three-month period a year earlier. The company attributed the growth to its acquisition of Dynetics as well as program wins.

Quarterly profit in the unit totaled $147 million, flat from the prior year.

For the year, the defense solutions group reported sales of $7.3 billion, up about 17% from 2019. This growth, Leidos said, was primarily attributable to Dynetics, program wins and an increase in volume on certain programs.

The group recorded 2020 profit of $506 million, up 7% from 2019.