LDOS News & Events

Truist analyst Tobey Sommer thinks Leidos' acquisition of Entrust is a quality start to what the firm expects to be a busy year for M&A/portfolio shaping at the company. The energy sector is a small but fast-growing and high margin piece of Leidos. Truist likes the deal on overall spending expectations for the utilities industry, immediate expected sales growth/margin accretion, and potential synergy/cross-selling opportunities. The firm also doesn't see pro forma post-close leverage as an impediment to more near-term M&A activity. Truist has a Buy rating on the shares with a price target of $220.

Kohlberg announced that it has entered into a definitive agreement to sell Entrust Solutions Group to Leidos for approximately $2.4B. The transaction represents a successful exit for Kohlberg, following its initial acquisition of the company in 2019 and a minority recapitalization in 2023. The transaction, which is subject to customary closing conditions and regulatory approvals, is expected to close in the second quarter of 2026.

Leidos has signed a definitive agreement to acquire Entrust Solutions Group from Kohlberg for approximately $2.4B. The transaction is expected to be immediately accretive to Leidos' revenue growth and adjusted EBITDA margin and accretive to non-GAAP diluted earnings per share in 2027. Leidos expects to fund the all-cash $2.4B transaction through a combination of new debt, cash on hand and commercial paper. The transaction is expected to close by the end of the second quarter of 2026, subject to customary closing conditions, including receipt of regulatory approvals.

Leidos and OpenAI are partnering to deploy artificial intelligence, including in government agencies. The companies plan on integrating Open AI-powered generative and agentic AI into the core workflows of customers in markets including digital modernization, health services, national security and infrastructure, and defense. "Leidos and OpenAI are harnessing the transformative power of AI to help improve how federal agencies operate," said Leidos CTO Ted Tanner. "With OpenAI's most powerful models in a secure configuration designed to protect Leidos and customer data, we're working together to enhance productivity and accelerate product development and delivery."