Leidos Finalizes $2.4 Billion Deal for ENTRUST, Forging an Energy Infrastructure Giant

RESTON, VA – January 26, 2026 – In a landmark move poised to reshape the American energy engineering landscape, technology and defense leader Leidos has announced a definitive agreement to acquire ENTRUST Solutions Group for approximately $2.4 billion. The all-cash transaction signals a major strategic pivot, effectively doubling the size of Leidos' energy infrastructure business and positioning it as a dominant force in the nation's urgent push to modernize its power grid.

The acquisition, which pulls ENTRUST from private equity firm Kohlberg, is a cornerstone of Leidos' long-term growth strategy. It immediately creates a combined energy engineering entity valued at over $1.3 billion, catapulting Leidos into the top tier of service providers for the utility sector.

"ENTRUST's engineering capabilities and customer base perfectly complement ours, and it has a consistent track record of growth and strong profitability," said Leidos Chief Executive Officer Tom Bell in a statement. "This deal is a bold step forward in support of Leidos' growth strategy and a national priority to expand America's energy infrastructure, while improving reliability and resilience against aging systems and extreme weather events."

The deal unites Leidos' two decades of expertise in electric transmission and distribution with ENTRUST's broad portfolio, which spans the entire power delivery spectrum from generation points to the end-user, including critical infrastructure for both gas and electric utilities.

A Strategic Play in a Trillion-Dollar Market

This acquisition is not merely an expansion but a calculated response to a seismic shift in national priorities. The move is explicitly aligned with Leidos' NorthStar 2030 strategy, a corporate roadmap that identifies secure energy infrastructure as a key pillar for future growth. After evaluating over 100 engineering firms, Leidos selected ENTRUST as the ideal partner to accelerate its ambitions.

The timing aligns with a projected torrent of investment. U.S. utilities are expected to inject an estimated $1 trillion over the next decade into a massive modernization effort. This spending is driven by a confluence of critical needs: replacing aging infrastructure, hardening the grid against increasingly severe weather events, meeting the surging power demands of data centers and artificial intelligence, and enhancing security against physical and cyber threats.

By acquiring ENTRUST, Leidos gains immediate, scaled access to these resilient utility budgets. The transaction significantly broadens its client base, adding ENTRUST's roster of blue-chip utility clients who are often bound by long-term master service agreements, providing a stable and highly visible revenue stream. Leidos is betting that becoming a one-stop shop for a wider array of engineering services will make it an indispensable partner for utilities navigating this complex transition.

Creating an End-to-End Engineering Powerhouse

The strategic value of the merger lies in the creation of a comprehensive, end-to-end infrastructure platform. Where Leidos has historically excelled in the transmission and distribution (T&D) segments of the electrical grid, ENTRUST brings deep expertise in power generation and the often-overlooked utility gas market. This combination allows the new entity to offer integrated solutions across the entire energy value chain.

The human capital involved is substantial. The deal merges Leidos' existing energy professionals with ENTRUST's 3,100-strong workforce, creating a combined team of over 5,500 energy experts spread across North America. This talent pool represents a formidable concentration of engineering, consulting, and data solutions expertise.

"By joining Leidos, we're uniting world-class power and energy engineering expertise to create a leading end-to-end infrastructure platform," noted Adam Biggam, CEO at ENTRUST. "Our combined 5,500+ energy professionals will have the resources, technology and reach to tackle the most complex challenges facing the utility and power markets today."

Beyond personnel, Leidos plans to leverage its technological advantages across ENTRUST's customer base. This includes deploying proprietary AI tools, such as its 'Skywire AI' platform, which has demonstrated significant efficiency gains and cost savings in engineering design and asset management. The ability to apply advanced data analytics and AI to a broader set of utility problems is a key component of the anticipated value creation.

Financial Structure and Path to Closing

From a financial standpoint, Leidos projects the transaction will be immediately accretive to its revenue growth and adjusted EBITDA margin. While it is expected to become accretive to non-GAAP diluted earnings per share in 2027, the company anticipates significant long-term value as synergies are realized. ENTRUST is poised to contribute approximately $650 million in annual revenues with what Leidos describes as attractive margins and a clear path to double-digit growth.

The nearly $2.4 billion purchase price, which Leidos notes is net of the present value of a tax asset, represents a valuation of approximately 16 times ENTRUST's projected next-12-months EBITDA. Leidos executives have framed this multiple as favorable when compared to similar transactions in the consolidating engineering services market.

To fund the all-cash deal, Leidos will utilize a combination of new debt, cash on hand, and commercial paper. The company has already secured a $1.4 billion senior unsecured 364-day bridge facility from Citi to ensure financing is in place, though the deal's closing is not contingent upon it. This structure gives Leidos flexibility to seek permanent financing on favorable terms post-announcement.

The transaction is expected to close by the end of the second quarter of 2026. However, it remains subject to customary closing conditions, chief among them being regulatory approval under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act, which will involve a review by either the Federal Trade Commission or the Department of Justice. This move not only reshapes Leidos' future but also signals a significant acceleration in the consolidation of the engineering services market, setting a new competitive benchmark for addressing America's critical energy infrastructure needs.