Leidos CEO: 'We will be aggressive in taking out cost'

Roger Krone, the chief executive of Leidos, said today the company is already starting to plan the integration of his company with the IT services business of Lockheed Martin.

Under the deal, announced late last month, Leidos will merge with a reshaped version of Lockheed's information systems and global solutions business to create a $10 billion services contractor. Speaking at the Cowen & Co. conference in New York today, Krone said he's hoping to complete the transaction on Sept. 30.

"With this transaction, we're actually able to fill in some of the capabilities we lost in the split [from Science Applications International Corp. in 2013] and, frankly, other capabilities that we think we need to be a broad services provider," Krone said.

Jim Reagan, Leidos' chief financial officer, promised that the deal is not "scale for scale's sake."

Krone, who touted his experience with past acquisitions, including the General Dynamics purchase of the M1 Abrams tank from Chrysler Defense and the Boeing acquisition of Hughes Space & Communications, said Leidos has already stood up an integration team.

Lockheed has two teams, a separation management team based at its corporate headquarters and an IS&GS team led by Sondra Barbour, the unit's chief.

"We will be aggressive in taking out cost and combining the two organizations," Krone said.