Kohlberg to Sell ENTRUST to Leidos for Approximately $2.4 Billion

Written by Emily J. Thompson, Senior Investment Analyst

LDOS-1.24%

Source: Benzinga

Updated: 1d ago

0mins

Source: Benzinga

Transaction Overview: Kohlberg has agreed to sell ENTRUST Solutions Group to Leidos Holdings for approximately $2.4 billion, with the deal expected to close in Q2 2026, indicating Kohlberg's active role in the private equity market.
Market Reaction: Leidos Holdings shares are under downward pressure, reflecting market concerns regarding the acquisition, which may impact its short-term stock performance.
Advisory Team: Houlihan Lokey and Perella Weinberg Partners are serving as financial advisors, Ropes & Gray provides legal counsel, and KPMG is the accounting advisor, ensuring the transaction's complexity is managed professionally.
Strategic Implications: After Kohlberg acquired ENTRUST in 2019, the company expanded its market share through organic growth and strategic acquisitions, and Leidos' acquisition will further enhance its capabilities in critical power infrastructure services in North America.

LDOS

$187.15+Infinity%1D

Analyst Views on LDOS

Wall Street analysts forecast LDOS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for LDOS is 219.70 USD with a low forecast of 178.00 USD and a high forecast of 235.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.

11 Analyst Rating

7 Buy

4 Hold

0 Sell

Moderate Buy

Current: 189.500

Low

178.00

Averages

219.70

High

235.00

Current: 189.500

Low

178.00

Averages

219.70

High

235.00

Truist

Michael Ciarmoli

maintain

$47 -> $54

2026-01-09

Reason

Truist

Michael Ciarmoli

Price Target

$47 -> $54

AI Analysis

2026-01-09

maintain

Reason

Truist analyst Michael Ciarmoli raised the firm's price target on Leonardo DRS to $54 from $47 and keeps a Buy rating on the shares. Despite a strong 2025, the Aerospace & Defense sector remains broadly bullish for 2026, with rising aircraft production and sustained aftermarket demand supporting both OE and AM segments, the analyst tells investors in a research note. Defense may see fewer catalysts, but recapitalization, geopolitical tensions, and replenishment needs should sustain demand, making stock selection critical amid elevated valuations, particularly for SMID defense tech names, the firm adds.

Stifel

Buy

Hold

downgrade

$220

2026-01-07

Reason

Stifel

Price Target

$220

2026-01-07

downgrade

Buy

Hold

Reason

Stifel downgraded Leidos to Hold from Buy with an unchanged price target of $220. The company has been executing "exceptionally well" on bookings, organic growth, and margins, the analyst tells investors in a research note. However, the firm sees a moderation of growth from Leidos' "high-margin" Department of Veterans Affairs compensation and pension medical exams as a challenge in 2026. This will hold back the stock, contends Stifel. While earnings from this "key contract" may not deteriorate as much as some worry, it will likely take time for Leidos to prove this sustainability, the firm says.

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Stifel

Jonathan Siegmann

Buy -> Hold

downgrade

$220

2026-01-07

Reason

Stifel

Jonathan Siegmann

Price Target

$220

2026-01-07

downgrade

Buy -> Hold

Reason

Stifel analyst Jonathan Siegmann downgraded Leidos to Hold from Buy with an unchanged price target of $220.

Citi

initiated

$218

2025-12-11

Reason

Citi

Price Target

$218

2025-12-11

initiated

Reason

Citi initiated coverage of Leidos with a Buy rating and $218 price target. The firm launched coverage on 24 stocks in the aerospace and defense sector, saying the group faces a "number of megatrends" across commercial aerospace, defense, shipbuilding, and space. Citi sees these trends creating at least one trillion-dollar market cap company in the coming years. GE Aerospace could get there in as little as five years, Citi contends. The firm calls RTX "the Marquee Megatrend stock" and believes Boeing is an "unusually attractive mega-cap turnaround" story. The analyst expects improving trends in Q4 and continued momentum in Q1 for the sector.

About LDOS

Leidos Holdings, Inc. is a holding company, which operates through its wholly owned subsidiary, Leidos, Inc. (Leidos). The Company’s segments include National Security & Digital, Health & Civil, Commercial & International and Defense Systems. Its National Security & Digital business provides technologically advanced services, solutions and products, as well as mission software capabilities for defense and intelligence customers in the areas of cyber, logistics, security operations and decision analytics. Its Health & Civil business provides services and solutions to federal and commercial customers in the areas of public health, care coordination, life and environmental sciences and transportation. Its Commercial & International business delivers a portfolio of products, services, and solutions aimed at securing national assets, modernizing energy and critical infrastructure, and enhancing mission outcomes. The Company serves government and commercial customers.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.