Lockheed Martin to sell EIG unit for $815M

AP News
Posted: Oct 13, 2010 9:04 AM
Lockheed Martin to sell EIG unit for $815M

Lockheed Martin said Wednesday it has agreed to sell its enterprise integration group to the private equity firm Veritas Capital for $815 million in cash.

Lockheed Martin Corp., which is based in Bethesda, Md., announced its plan to sell the group in June along with the Pacific Architects and Engineers unit to avoid potential problems over new government regulations for defense contractors.

Defense contracting reform legislation passed last year includes a provision designed to reduce conflicts of interest for contractors, many of which are huge and deeply involved in a broad range of government operations. Lawmakers were concerned that this could give companies access to nonpublic information that could help them win additional contracts.

For example, Lockheed could potentially be doing systems engineering for an intelligence agency while at the same time bidding on a satellite contract for that same agency. In addition to systems engineering, the EIG unit provides architecture and integration services for government customers.

Completion of the deal is subject to review by antitrust regulators and other conditions, but it is expected to close by the end of this year.

Lockheed paid an undisclosed sum for the units in 2006. The two units account for about 3 percent of Lockheed's annual revenue.

Lockheed shares slipped 5 cents to $70.50 in pre-market trading.