KBR to acquire LinQuest for $737 million
The exterior of KBR's global headquarters in Houston. Courtesy of KBR.
By
Ross Wilkers
This is KBR's latest in a multi-year series of moves to build out its space business.
KBR has agreed to acquire space systems engineering company LinQuest Corp. for $737 million as part of the former's continued work to build out its technical offerings for defense and national security agencies.
LinQuest employs approximately 1,550 people whose customer set includes Space Force, the Air Force and other agencies across the defense and intelligence communities. The all-cash transaction was announced Tuesday and the companies expect it to close in the second half of this year, pending regulatory approvals.
Opened for business in 2004, LinQuest has sought to chart its course as an independent design and integration partner for agencies seeking to overhaul their space architectures.
Private equity firms Madison Dearborn Partners and CoVant Management acquired LinQuest in 2018, which preceded the standup of Space Force one year later. MDP subsequently took full ownership of the LinQuest business at some point between then and now.
In a release, LinQuest's chief executive Greg Young noted the company tripled its workforce size and quadrupled its profits over the past five years.
LinQuest used that private equity backing to build its strategy around areas such as digital engineering, integration advanced analytics, digital engineering, technology development, electronic warfare and operational solutions.
LinQuest expects to generate $500 million-to-$550 million in revenue this year and touts a margin of double-digit adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), according to a KBR investor presentation.
For KBR, its agreement to buy LinQuest takes place almost four years after the $827 million purchase of Centauri that also centered on military space programs.
On a personal note, the most recent episode of our WT 360 podcast published Monday features my conversation with KBR's U.S. government solutions president Byron Bright.
The interview was recorded in late May as part of our annual coverage WT's 2024 Top 100 rankings, and without yours truly knowing that the transaction with LinQuest was in the works nor any other.
But Bright's description of KBR's multi-year push to build out its space business makes for an interesting listen. That portion of our chat picks up at around 14:20.
Baird acted as the exclusive financial adviser to LinQuest. Kirkland & Ellis LLP acted as legal adviser to LinQuest. Arena Strategic Advisors supported financial due diligence for KBR. Gibson, Dunn & Crutcher LLP acted as legal adviser to KBR for the transaction.
KBR is scheduled to conduct its second quarter earnings call with investors on July 24 and surely will have more to say about LinQuest.