Perspecta CEO plans to retire after close of Peraton deal
Perspecta Chairman and CEO Mac Curtis will retire once that company's transaction with Peraton is completed in the coming months, according to a letter he sent to employees.
Peraton, backed by Veritas Capital, completed the first step in its transformation this week when it closed the acquisition of Northrop Grumman’s IT business. Step two is the pending acquisition of Perspecta, a publicly-traded company where Veritas holds 14.5 percent of the shares.
The new company will be called Peraton, whose CEO Stu Shea will continue to lead the company.
Curtis, who has led Perspecta and one of its predecessor companies since 2013, announced his retirement in a letter to employees that was released in a filing with the Securities and Exchange Commission.
“This is not a goodbye note in anyway -- there is much important work still to do,” Curtis wrote.
Curtis told Perspecta employees he wanted to make the announcement to squelch any rumors and avoid distractions as the closure gets nearer.
“Serving as Perspecta’s chairman and CEO has been the honor of my lifetime,” he wrote. “I will remain your leader, champion and voice as we navigate through this intricate process together.”
Curtis said he wants the transition to be smooth and seamless for customers and employees.
“We have always operated with honesty and transparency, so you should expect nothing less during this process,” he wrote. “Please continue to focus on serving your customers and proudly representing Perspecta.”
In an accompanying letter to Perspecta employees, Veritas CEO and Managing Ramzi Mussallam both praised and mentioned how he has worked with Curtis for more than 15 years. Veritas previously owned Vangent, a company Curtis led until its sale to General Dynamics in 2011.
Two years after the Vangent sale, Veritas brought Curtis back to run The SI Organization. Veritas created that company through the acquisition of Lockheed Martin’s Enterprise Integration Group in 2010.
Curtis and Veritas later rebranded the company as Vencore, which then became Perspecta when it merged with the public sector business of DXC Technologies and another Veritas property KeyPoint Solutions in 2018.
Perspecta became a publicly-traded copmany at that point with Veritas as its largest single stockholder with 14.5 percent of its shares.
Perspecta had several large wins in the years since its creation. But the stinging loss came last year when Leidos took the $7.7 billion Navy NGEN network services contract that represented between one-fourth and one-fifth of annual revenue. Despite the loss, the company still held its trailing 12-month book-to-bill ratio above 1.
The company also attracted the interest of Jana Partners, an activist investor who saw Perspecta’s stock as undervalued and a good investment opportunity. It took a 5.9 percent stake in Perspecta. Curtis also thought Perspecta's stock was undervalued and said so to Wall Street analysts.
Veritas never lost faith in Perspecta and later began exploring the option of taking the company private, which then led to the deal to combine it with another of its properties.
“Veritas Capital has been an investor in Perspecta and its predecessor companies for over a decade,” Musallam wrote to Perspecta employees this week. “We have always recognized Perspecta as a differentiated leader in this space: for its longstanding and intimate customer relationships, its best-in-class solutions and cutting-edge technology, and most of all for its dedicated and extremely talented employee base.”
The combination of Peraton, Northrop Grumman IT and Perspecta will create one of the largest government contractors in the technology sector with between $7.5 billion and $8 billion in annual revenue. Peraton will become a private company under Veritas’ ownership.
Both letters from Curtis and Mussallam emphasized the important role that Perspecta’s employees will play in the success of the new company. The notes convey praise and gratitude for the employees but also strike a reassuring tone.
“The Perspecta workforce will continue to play a critical role in our future success,” Musallam wrote. “I look forward to working with the other talented leaders of Perspecta, many of whom I know well after years of professional interaction, to serve our customers and markets with dedication and excellence and build a leader in the government technology market.”
At the close of his letter, Curtis wrote:
“Our purpose and values are as important as ever and I know we will continue to fulfill and honor them. I promise to put forth my best efforts on behalf of each and every one you in the coming months. I ask you to do the same.”
Posted by Nick Wakeman on Feb 03, 2021 at 8:32 AM