Booz Allen sells off U.S. government business

Booz Allen Hamilton Inc. will separate its U.S. government and global commercial businesses, selling a majority stake in the U.S. government business to the Carlyle Group, of Washington, for $2.54 billion.

The strategic realignment, which was recommended unanimously by the company's board of directors, will enable Booz Allen's two businesses to refocus on their distinct end markets, the company said today.

Booz Allen's commercial business, which will include its international government work, will form a stand-alone company owned and operated by the commercial officers. It will continue its focus on management consulting.

"As a stand-alone company, the new commercial and international business will have greater agility to meet the needs of its client base, maximize its potential and realize significant growth across the globe," said Ralph Shrader, chairman and chief executive officer at Booz Allen.

Based in McLean, Va., Booz Allen's U.S. government business has more than 18,000 employees in 80 offices worldwide, generating annual net revenue in excess of $2.7 billion.

Booz Allen said in December 2007 that splitting up the company was being considered. In an e-mail Shrader sent to all employees, he said the partners and board of directors had discussed a new strategic direction "that could lead to our commercial and U.S. government businesses operating as separate firms in the future."

The transaction is expected to close in mid to late 2008, subject to shareholder and regulatory approvals and other customary closing conditions.

Booz Allen ranks No. 11 on Washington Technology's 2008 Top 100 list of the largest federal government prime contractors.