Lockheed Martin Could Spin Off Its $6 Billion Government IT Business
"It has become increasingly difficult for us to compete effectively," a spokesperson said.
Lockheed Martin on Monday announced plans to acquire helicopter-maker Sikorsky for $9 billion in cash, prompting analysts to wonder how much bigger the Bethesda-based defense contractor can get.
Separately, the company revealed it was considering spinning off its government IT division in an attempt to streamline its services. Lockheed Martin executives plan to review the Information Systems & Global Solutions and Missiles and Fire Control business segments over the 2015 calendar year, weighing options including a spinoff to shareholders or a sale.
“As global security market dynamics shift, this review will strengthen our competitive posture," CEO Marillyn Hewson said in a statement. The divisions under review are estimated to generate a projected $6 billion in sales in 2015, and are composed of 17,000 employees. (The company took in about $45.6 billion in net sales in 2014, according to Lockheed's annual report.)
“[A]s market dynamics have changed, it has become increasingly difficult for us to compete effectively," Lockheed spokesman Dan Nelson said in a statement emailed to Nextgov.
Lockheed's IT programs not included in the review are focused on defense and intelligence, according to the company.
While it performs the review, the company plans to maintain the IT business' operations and plans to continue reporting on its financial success.