Lockheed finds buyer for PAE business
By
Nick Wakeman
Lockheed Martin finds private equity buyer for PAE unit as part of its divestiture plan.
Lockheed Martin Corp. has found a buyer for its Pacific Architects and Engineers business as the company moves forward with a multistep divestiture plan.
The private equity group Lindsay Goldberg is acquiring PAE for an undisclosed amount. The deal is expected to close during the second quarter of 2011, which ends June 30.
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Why Lockheed said goodbye to $1.3 billion
The company announced in June 2010 that it would sell PAE and the Enterprise Integration Group, which combined represented about $1.3 billion in annual revenue.
EIG was sold to Veritas Capital for $815 million in November. The deal was driven by government concerns with organizational conflicts of interest.
The sale of PAE is part of Lockheed Martin's move to focus on its core government business. Lockheed bought PAE in 2006.
“The corporation’s decision last June to divest this business was based on its assessment that the markets PAE serves had evolved in ways that were inconsistent with the corporation’s long-term strategy,” Lockheed said in a press release.
PAE provides engineering and infrastructure support work in developing countries.
“When we acquired them, we thought that we would evolve the company into more of an information-oriented business like the rest of Lockheed Martin,” said Linda Gooden, executive vice president of the company’s information and systems and global solutions business.
But that plan never came to fruition as Lockheed got to know PAE’s customers and market better. “Their mission is important, but it never aligned with our core competencies,” she said during an interview in June 2010.
PAE’s work falls more in areas such as construction and physical infrastructure support. The company takes on projects in countries such as Liberia, Congo, Chad and Sudan, she said.