How Stu Shea led Peraton away from being 'misfits'

In any industry, chief executives come in with a promise of change and growth for their companies.

They talk about working off of an existing strategy and refining it, or an entire revamp. Or they start from scratch, as Stu Shea did when he became CEO of the former Harris IT Corp. business that Veritas Capital acquired in 2017.

CEOs are mostly positive, acknowledging challenges while pointing a way forward. They promise bold moves to take advantage of shifts in the market.

As CEO of Peraton, Stu Shea has done all of that and more during his seven years as the company’s leader.

Shea is stepping down now as Peraton brings in a new CEO in Steve Schorer, who joins the company on Monday.

This transition is not entirely surprising. Shea even alluded to it during our Q&A at our 2023 Top 100 event.

“I’m a journeyman,” Shea said last year about his departure. “I’m here for a certain period of time.”

He joked then about telling his wife that he would be the CEO for another five years and that she would be living in another state, “playing golf with another guy.”

Neither of them have to worry about that now, but I do find it interesting that Peraton's announcement of the move to Schorer does not say that Shea is retiring.

Given Shea's experience, I’m sure there are several companies that would want to bring him on as CEO. The question is whether he wants to do that again. I plan to ask him that question.

Shea has been a catalyst for change, dating back to when he was a senior executive at the old Science Applications International Corp.

He helped design the split that created Leidos and the current SAIC in 2013.

Shea than became chief operating officer of Leidos under CEO John Jumper. But Shea left in 2014 as Leidos was looking to hire a successor to Jumper.

"Stu, the board of directors, and I have mutually agreed that now is a good time for Stu to pursue new interests beyond Leidos," Jumper said at the time.

The company’s board apparently rebuffed Shea’s desire to replace Jumper.

Shea spent the next three years working with private equity firms and working as a consultant. Then Veritas approached him in 2017 about the IT business that was carved out of what was then Harris Corp.

Peraton's branding and identity as we know it today launched later in that spring, but the name was just the beginning.

The company had almost zero infrastructure and was collection of earlier acquisitions by Harris. Shea referred to Peraton company as an “island of misfits.”

Those first few years of the initial buildout of Peraton Peraton laid the groundwork for perhaps Shea’s signature moves as a GovCon leader – the virtually simultaneous absorptions of Northrop Grumman’s IT business and Perspecta in 2021.

Either of those businesses would have been a challenge to integrate. Each by itself would have more than tripled the size of Peraton.

But in combination, Peraton went from about $1 billion in annual revenue to $3 billion after adding the Northrop IT unit. Peraton then leapt to nearly $7 billion when Perspecta was added a few months later.

Now Peraton is approaching $8 billion in annual revenue and has more than 18,000 employees. Peraton took position No. 11 on the 2024 Top 100 with $4.6 billion in prime contract obligations.

It should go without saying that Shea has substantial laurels to rest on if that is what he chooses to do.

A question that remains unanswered is what Veritas’ long-term plan is for Peraton. As Shea talked about in our Top 100 interview, there are few strategic buyers that would acquire something as large as Peraton.

But theoretically, someone could merge with Peraton in the same kind of move we saw Leidos pull off in 2016 through its combination with the Lockheed Martin IT business. Or how Perspecta launched in 2021 through the complex DXC-Vencore-KeyPoint transaction.

I always had it in my head that Shea would take the company to the public market at some point and then retire.

That could still be the long-term plan for Veritas, but perhaps the runway became too long for Shea to stick around.

That’s another question I’ll ask him when we talk in the coming weeks. The request has been made.