68 F
Los Angeles
Wednesday, Jul 6, 2022

Northrop to Sell Defense Advisory Unit

Northrop Grumman has agreed to sell its TASC government-consulting unit for $1.65 billion to an investor group led by General Atlantic and affiliates of Kohlberg Kravis Roberts.

The Los Angeles defense contractor announced on Sunday that the sale will generate about $1.1 billion in cash after taxes, and complies with new rules designed to prevent conflicts of interest by not putting defense contractors in the position of advising government agencies on weapons systems and bidding for contracts on them.

“This transaction is in the best interest of Northrop Grumman’s customers, employees and shareholders,” Chief Executive Ronald Sugar said in a statement. “TASC is a remarkable organization with a proud 43-year heritage of supporting critical national security missions. We are confident the investors understand the critical importance of its customers’ missions and the depth and sophistication of its employees’ expertise.”

The deal requires regulatory approval, and Northrop said that an OK could come by the end of the year. The TASC unit is based in Chantilly, Va. and has nearly 5,000 employees. It was acquired by Northrop in 2001 as part of the $5 billion takeover of Litton Industries.

Northrop said it planned to use the $1.1 billion in proceeds from the sale to increase its stock buyback program.

Northrop shares were up $1.34, or 2.6 percent, to $53.71 in midday trading on the New York Stock Exchange.

Featured Articles

Related Articles