Lockheed Martin Sells Enterprise Integration Group to Private Equity Firm

NEW YORK/WASHINGTON (Reuters) – Lockheed Martin Corp (NYSE:LMT) has agreed to sell its Enterprise Integration Group unit to private equity firm Veritas Capital for $815 million.

Lockheed’s decision to sell EIG, which advises government agencies on military platforms, was prompted by a tightening of Pentagon rules aimed at removing potential organizational conflicts of interest caused when contractors advise the government on weapons systems for which they end up bidding.

New York-based Veritas Capital, focused on the defense and government services sector, has beat out several private equity firms, including Leonard Green & Partners’ Scitor, Carlyle’s CYL.UL Booz Allen and Kohlberg Kravis Roberts’ KKR.UL TASC, sources familiar with the transaction told Reuters.

Technical services company ManTech International (MANT.O) had also expressed interest in EIG early in the process, the sources said.

Lockheed is also in the advanced stage of selling another of its divisions, Pacific Architects and Engineers unit, which people familiar with the matter have said could fetch about $500 million and attracted interest from engineering and construction companies as well as buyout firms.

EIG, which has about 1,800 employees, generated revenue of $626 million for the 12 months that ended June 30.

JPMorgan Chase (NYSE:JPM) and Stone Key Partners advised Lockheed on the EIG sale.