KBR continues push into government services with deal to buy SGT

By Marjorie Censer / February 23, 2018

KBR said today it has agreed to buy Stinger Ghaffarian Technologies, better known as SGT, for $355 million as it increasingly moves into the government services market.

The 2,500-employee SGT provides technology, engineering services, mission operations and software to the government, including for space and national security programs.

In 2016, KBR bought both Wyle and Honeywell Technology Solutions, quickly bolstering its profile in the government services market.

"The addition of SGT solidifies KBRwyle's position as an established leader in human space exploration and opens up significant new opportunities in both civil and military space," the company said today. "The acquisition will also strengthen KBR's support for strategic clients and enhance our position for opportunities in the national security and commercial space markets."

Stuart Bradie, KBR's chief executive, told analysts during a call this morning the acquisition provides KBR new contract vehicles. Additionally, SGT has a software development certification level he said will serve as a "clear differentiator."

Bradie also argued the deal "comes at a time when there are strong market fundamentals."

"U.S. defense spending is strong and in areas that should benefit KBRwyle," he said, particularly pointing to an emphasis on space.

Meanwhile, KBR said today sales in its government services group hit $2.2 billion in 2017, up 61 percent from the prior year. The company attributed the growth to the acquisitions of Wyle and HTSI as well as "continued expansion under existing U.S. government services contracts."

The unit's profit for the year reached $155 million, up $18 million from the prior year.