M&A

Harris closes deal to sell IT services biz to Veritas Capital

Harris Corp. has closed the sale of its government IT business to Veritas Capital for $690 million in a portfolio reshaping move for the military radio maker.

For Veritas, this acquisition adds approximately 3,500 employees and $1.1 billion in IT and managed services revenue from agencies such as NASA and those in national security and intelligence. The business' focus areas include secure communications, space operations and cybersecurity.

Veritas said it will rename and rebrand the business, which will operate as a standalone company with its own management team independent of other entities in the private equity firm's portfolio.

Harris will keep the $3.5 billion air traffic control business formerly part of IT services.

First announced in January, this transaction is the latest in a series of divestitures for Melbourne, Fla.-based Harris since its 2015 acquisition of former rival Exelis for $4.7 billion. That deal was funded with $3.6 billion in debt. The credit ratings agency Fitch said earlier this month the company is on target to pay $2 billion down by the end of its 2018 fiscal year ending July.

Harris sold its former CapRock Communications maritime commercial business to SpeedCast International for $425 million in a deal that closed in January.

Fitch expects the IT services and CapRock divestitures to remove $1.4 billion from Harris’ 2017 revenue.

Both sales took place in light of a move by activist investor group Jana Partners to become one of Harris’ 10 largest shareholders in August and subsequently both parties agreed to a pair of two mutually-acceptable directors.

Under Bill Brown’s six-year CEO tenure, Harris has divested nearly all of its now-former commercial-focused businesses to re-position the company as a more pure-play technology manufacturer for government agencies.

The company has sold its commercial broadcasting, commercial health care and composite aerostructures businesses in that time. Harris inherited the aerostructures business from Exelis.

About the Author

Ross Wilkers is a senior staff writer for Washington Technology. He can be reached at rwilkers@washingtontechnology.com. Follow him on Twitter: @rosswilkers. Also find and connect with him on LinkedIn.

Reader Comments

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

What is your e-mail address?

My e-mail address is:

Do you have a password?

Forgot your password? Click here
close

Trending

  • POWER TRAINING: How to engage your customers

    Don't miss our July 12 Washington Technology Power Training session on Mastering Stakeholder Engagement, where you'll learned the critical skills you need to more fully connect with your customers and win more business. Read More

  • PROJECT 38 PODCAST

    In our latest Project 38 Podcast, editor Nick Wakeman and senior staff writer Ross Wilkers discuss the major news events so far in 2019 and what major trends are on the horizon. Read More

contracts DB

Washington Technology Daily

Sign up for our newsletter.

Terms and Privacy Policy consent

I agree to this site's Privacy Policy.