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Northrop Grumman to finish selling IT unit ‘very soon'

Northrop Grumman expects to complete the divestiture of its information technology services business “very soon”, the US defence contractor said on 28 January.

Northrop Grumman is based in Falls Church, Virginia. (Credit: Northrop Grumman)

Northrop Grumman is based in Falls Church, Virginia. (Credit: Northrop Grumman)

Northrop Grumman had previously indicated that the sale of the business to US private equity firm Veritas Capital for USD3.4 billion would happen sometime in the first half of 2021.

Northrop Grumman announced the divestiture in December 2020, saying the deal would allow it to focus on growing its core businesses, which is to develop military aircraft and other large systems. Veritas plans to combine the IT business with two other US government technology providers: Peraton, which it already owns, and Perspecta, which it is in the process of acquiring.

“We are confident that [Veritas is] the right owner for this business, that it has a vision for it, that it has a commitment to invest, and that it will be a good employer for our employees who will transition,” said Kathy Warden, Northrop Grumman’s chairman, CEO, and president.

The IT unit had a revenue of USD2.3 billion in 2020, with USD1.6 billion in Northrop Grumman’s Defense Systems sector, USD500 million in its Mission Systems sector, and USD200 million in its Space Systems sector.

Northrop Grumman also said that it is exiting a “small”, cluster munitions-related contract that it inherited from its 2018 acquisition of Orbital ATK. Although the contract is designed to support the safe removal of cluster munitions, Northrop Grumman said it does not want to appear to be endorsing such weapons, which have generated human rights concerns because they can leave behind unexploded remnants that can harm civilians.

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