Leidos sheds security screening unit in agreement with Analogic

Leidos is carving out its Security Enterprise Solutions unit to become part of another company that it will co-own with investment firm Altaris.

Altaris is the backer of Analogic and will own 58.5% of what Leidos calls a joint venture. Leidos will hold the remaining 41.5% and Analogic will operate and control the business, according to a regulatory filing.

Leidos is moving 1,500 employees and $625 million in revenue to Analogic, the companies said Wednesday.

The Leidos Security Enterprise Solutions business was created by Leidos after it paid $1 billion to acquire L3Harris Technologies security detection and automation business in 2020.

In creating the JV, the companies are seeking to combine Leidos’ screening technologies and industrial automation capabilities with Analogic’s specialized manufacturing and imaging technologies.

The JV will develop security screening and detection technologies used at airports, border crossings, and critical infrastructure worldwide. The combination will also increase research-and-development efforts around screening technologies and support a faster transition to artificial intelligence-native and 3D imaging solutions, Leidos said.

“Our unified joint venture represents a focused step to strengthen U.S. capabilities in security detection at a time when global travel and trade continue to grow,” said Leidos CEO Tom Bell.

The transaction includes the assumption of some debt on the part of Analogic and is expected to close after standard regulator reviews in the second half of 2026.

The agreement is intended to let Analogic focus on growth in the global detection and imaging market, and for Leidos to continue investing in core growth areas identified in its NorthStar 2030 strategy.

Leidos retained PJT Partners as financial adviser. Fried, Frank, Harris, Shriver & Jacobson LLP and DLA Piper were legal advisers to Leidos. KPMG was the accounting adviser to Leidos.

Kirkland & Ellis LLP and Hinckley Allen & Snyder LLP acted as legal advisers to Analogic, whose accounting adviser was Ernst & Young.