Lockheed Martin to Buy OAO Corp.
- By Patience Wait
- Oct 26, 2001
Lockheed Martin Corp. is buying OAO Corp., a move that will bring Lockheed Martin additional intelligence and NASA business and bolster its already formidable place in the government information technology market.
Terms of the deal, announced Oct. 26, were undisclosed. It is the first IT-related acquisition by systems integrator Lockheed Martin in several years.
OAO of Greenbelt, Md., employs more than 2,000 people and delivers a broad range of IT solutions. The company's 2000 revenue exceeded $200 million. Among its contracts, OAO provides seat management outsourcing services to several of NASA's centers. The company also provides IT consulting and business process re-engineering services.
Lockheed Martin of Bethesda, Md., will combine its Information Support Services division with OAO to create a new organization. Linda Gooden, president of the ISS unit, will lead the new organization.
The federal IT market, which is projected to increase from $36 billion this year to more than $60 billion in 2006, is an important element in Lockheed Martin's growth strategy, company official said.
"OAO has a significant presence in both NASA and the intelligence community, so with their compatible products and services, the acquisition made sense," said ISS spokesman Joe Wagovich.
Lockheed Martin has ranked No. 1 for seven years straight on Washington Technology's list of top 100 systems integrators in the government IT market, as measured by revenue.
Tom Meagher, vice president of equity research with BB&T Capital Markets, Richmond, Va., said the announcement "is not big news. [OAO] has been on the block forever." Lockheed Martin must have "got them for next to nothing," he said.
The purchase is subject to government approval, including review under the antitrust acts. It is expected to close by the end of this year.
Wagovich said it is too early to talk about staffing issues. "We'll be reviewing that after the deal closes," he said.