General Dynamics Buys Anteon International For $2.2 Billion

Like rival Lockheed Martin, General Dynamics was widely rumored to be on the hunt for an acquisition that would give it a bigger footprint in the fast growing government IT services market. Lockheed was reportedly close to acquiring Computer Sciences Corp. in partnership with three venture capital firms, but talks are said to have broken down over the structure of the deal. That led a number of analysts to believe General Dynamics would step up and zero in on CSC.

Instead, it's opted for Anteon, which gives General Dynamics a well-established government service provider with more than 9,500 employees worldwide and a current order backlog of $6.6 billion. Anteon says it expects 2006 sales of $1.72 billion.

In a statement, General Dynamics chairman and CEO Nicholas Chabraja said the deal strengthens his company's ability "to provide a broad menu of seamless information technology services to Defense, Intelligence and Homeland Security customers."

General Dynamics says the transaction, subject to regulatory approval, will likely close in the second quarter of 2006.