Military shipbuilding company Huntington Ingalls Industries Inc. said it would acquire Alion Science and Technology Corp. for $1.65 billion in cash from Veritas Capital.
Alion, a solutions provider for the global defense marketplace, would become part of Huntington Ingalls Industries’ Technical Solutions division. Huntington Ingalls said it expects the deal to close in the second half of 2021.
Alion–which provides advanced engineering and R&D services in areas including intelligence, surveillance, and reconnaissance, military training and simulation, cyber, and data analytics–has more than $3 billion in backlog currently, with more than $5 billion in estimated contract value, Huntington Ingalls said. The U.S. Navy represents about one third of its current annual revenue.
Huntington Ingalls said it expects Alion to contribute fiscal 2022 revenue of about $1.6 billion and adjusted earnings before interest, taxes, depreciation, and amortization of about $135 million. The company said the deal enhances the overall Huntington Ingalls 2022-2024 free cash flow guidance by about $200 million.
Huntington Ingalls said it expects about $25 million of one-time transaction and financing related expenses in 2021. The company said it plans to fund the purchase price through a new senior notes and a new term loan facility.