BAE Systems N.A. Buys DigitalNet for $600 Million

Rockville, Md.-based BAE, the U.S.-based subsidiary of BAE Systems (No. 14 on the VARBusiness 500 and No. 18 on GovernmentVAR's 100 Top Federal Integrators listing), posted $4.83 billion in sales last year, while DigitalNet (VB500 107) recorded $336.3 million in sales in 2003.

DigitalNet, Herndon, Va., has approximately 2,200 employees and provides networked infrastructure and information-assurance solutions—including strategic consulting services, applications development and integration, and e-government applications and strategies—to the federal government. When the deal is done, BAE N.A. will be recording annual revenue of more than $1.2 billion, making it one of the largest federal players in the space. DigitalNet works with the departments of Defense, Homeland Security, Justice, Treasury and State, as well as intelligence agencies, according to a company spokesman.

The company also will enhance BAE N.A.'s presence in managed IT and information assurance, and add to its portfolio that addresses U.S. security priorities for network-centric infrastructure and information-sharing between the intelligence, homeland security and war-fighting communities, the spokesman said.

"The acquisition of DigitalNet is consistent with BAE Systems' strategy of acquiring profitable, growing businesses with strong, differentiated technologies that complement BAE Systems' already broad range of capabilities," said Mark Ronald, president and CEO of BAE Systems N.A., in a statement.

"The acquisition by BAE Systems not only provides significant value for our shareholders, but it enables DigitalNet to expand its ability to deliver complete IT solutions to a broader customer base after the acquisition," said Ken Bajaj, DigitalNet's chairman and CEO, also in a statement. "We will then be able to more aggressively pursue larger opportunities."