SAIC adds to IT modernization portfolio with $1.2B acquisition of Unisys Federal

In a deal that will expand SAIC’s government IT business, the Northern Virginia technology integrator plans to acquire Unisys Federal for $1.2 billion.

The acquisition, expected to close by May 1, will strengthen SAIC’s ability to provide “infrastructure modernization, cloud migration, managed services, and enterprise IT-as-a-service,” or EITaaS, according to a news release.

Unisys Federal’s customer list includes more than a dozen military and civilian agencies. Recent contracts include a $76.3 million EITaaS deal with the Air Force, and a $144 million cloud migration project with the National Oceanic and Atmospheric Administration.

“With the addition of Unisys Federal, SAIC will be a leading provider of digital transformation services and solutions to the federal government. This exciting opportunity advances our strategy by building on our modernization capabilities, increasing customer access, accelerating growth and enhancing shareholder value,” said SAIC CEO Nazzic Keene.

SAIC’s federal work includes a $727 million cloud computing contract with the Air Force that recently survived a bid protest.

Based on fiscal 2018 data analyzed by Bloomberg Government, SAIC is the seventh-largest federal IT contractor, with $1.2 billion in obligations. Unisys Corp. was ranked 110th in the wider government contracting market, with $559 million in contracts over the same period.

Unisys Chairman and CEO Peter Altabef said the sale “is a tribute to the unique and attractive business that our U.S. Federal colleagues have built over many years. Under the leadership of Venkatapathi ‘PV’ Puvvada, we have become known as a true innovator in the federal market, leveraging powerful intellectual property and a world-class team. This transaction will allow us to significantly enhance our balance sheet, which will create increased operational flexibility that will ultimately position us to better serve our clients while delivering increased value to investors.”

It’s an all-cash deal for Pennsylvania-based Unisys and SAIC.