Leidos Bets Big on Grid Modernization with $2.4B ENTRUST Acquisition

MOUNT KISCO, NY – January 26, 2026 – In a landmark move signaling a major consolidation in the energy services sector, technology and engineering giant Leidos has entered into a definitive agreement to acquire ENTRUST Solutions Group from private equity firm Kohlberg for approximately $2.4 billion. The all-cash transaction marks a strategic push by Leidos to dominate the burgeoning market for North American power infrastructure modernization and a highly successful exit for Kohlberg.

The deal unites two significant players in the utility and infrastructure space. Leidos, a Fortune 500 firm primarily known for its government and defense contracting, will dramatically expand its commercial energy business. ENTRUST, a specialized consulting and engineering platform, brings a workforce of over 3,000 professionals and deep expertise in securing critical power infrastructure. The combined entity is poised to become a dominant force in a sector fueled by unprecedented demand and national urgency.

A Strategic Power Play for Leidos

For Leidos, the acquisition is a cornerstone of its ambitious “NorthStar 2030” strategy, which identifies the expansion of its energy business as a key pillar for future growth. The purchase effectively doubles the size of Leidos' energy infrastructure engineering business, creating a new $1.3 billion annual revenue unit that company executives are calling a “powerhouse.”

This move is about more than just scale; it’s about strategic depth. While Leidos has a strong foothold in transmission and distribution services for electric utilities, ENTRUST provides complementary capabilities across the entire power delivery value chain. This includes critical expertise in power generation and, significantly, the natural gas utility market—a new frontier for Leidos. The acquisition broadens Leidos' customer base and creates a more resilient, diversified portfolio capable of offering end-to-end solutions.

Leidos plans to leverage significant synergies between the two companies. Management anticipates cross-selling opportunities by introducing its core non-engineering services, such as advanced cybersecurity and IT solutions, to ENTRUST’s extensive list of utility clients. Furthermore, Leidos intends to deploy its proprietary Skywire AI tool across ENTRUST accounts. The AI-powered platform has a proven track record of delivering substantial efficiency gains and cost savings for clients, a compelling value proposition in a capital-intensive industry.

“Kohlberg has been an invaluable strategic partner whose operational support and industry knowledge have helped to meaningfully support our growth aspirations and transform ENTRUST into the category leader we are today,” said Adam Biggam, ENTRUST CEO, in the original announcement. He noted the collaboration strengthened their ability to serve customers and that joining Leidos will enable them to “continue strengthening North America’s critical power infrastructure for years to come.”

Cashing In on Critical Infrastructure

The sale represents a triumphant exit for Kohlberg, a middle-market private equity firm that first acquired ENTRUST in 2019. Over its six-year stewardship, Kohlberg oversaw a period of dramatic expansion for the engineering group. Through a combination of organic growth initiatives and a series of strategic acquisitions, ENTRUST markedly expanded its geographic reach from 40 locations, broadened its service capabilities, and scaled its workforce and operational infrastructure.

This growth trajectory culminated in a minority recapitalization in 2023 before the ultimate sale to Leidos. The $2.4 billion price tag validates Kohlberg’s investment thesis: that the essential, non-discretionary nature of utility and infrastructure services provides a fertile ground for value creation.

“We are grateful for the partnership with ENTRUST and are honored to have been part of this chapter of the Company’s growth,” stated Benjamin Mao, Senior Partner at Kohlberg. “We are extremely proud of CEO Adam Biggam and the entire ENTRUST team, and we look forward to the Company’s continued success as it joins Leidos.”

Gus Harwood, a Partner at Kohlberg, added, “Since we first partnered with ENTRUST in 2019, the Company has greatly expanded its footprint, built out its service capabilities and distinguished its brand in the marketplace... We believe ENTRUST is exceptionally positioned to capitalize on the increasing demand for power infrastructure and grid development.”

Riding a Wave of Grid Modernization

The Leidos-ENTRUST deal is not happening in a vacuum. It is a direct response to immense, secular tailwinds sweeping across the North American energy landscape. The continent’s power grid, much of which was built decades ago, is straining under the weight of aging components and surging demand. The average age of large power transformers, for example, now exceeds 40 years.

This has created a national priority to invest in grid modernization, reliability, and resilience. U.S. utilities are projected to invest a staggering $1 trillion over the next decade to upgrade their systems. This investment is being driven by a perfect storm of factors, including the need to harden infrastructure against extreme weather events and the explosive growth in electricity consumption. Total electricity use is projected to climb 32% by 2030, fueled by the proliferation of massive data centers required for artificial intelligence and a resurgence in domestic industrial manufacturing.

The energy market, once characterized by slow, single-digit growth, is now seen as a sustainable high-growth sector for the foreseeable future. This transaction positions the combined Leidos-ENTRUST entity as a scaled leader in a fragmented market that is ripe for consolidation, allowing it to capture a significant share of the projected $3.3 trillion in capital flows to the energy sector in 2025.

The Financial and Regulatory Path Forward

Leidos will finance the $2.4 billion acquisition through a mix of $1.4 billion in new debt, $500 million in cash on hand, and $500 million from commercial paper. The company anticipates a post-closing leverage ratio of 2.6x gross debt to EBITDA, which remains within its target range. The purchase price represents a multiple of approximately 16 times ENTRUST's estimated next-twelve-months EBITDA, a valuation considered favorable in the current market.

Financially, the deal is expected to be immediately accretive to Leidos' revenue growth and adjusted EBITDA margins. While some initial integration costs are expected, the transaction is projected to become accretive to non-GAAP diluted earnings per share in 2027, with significant shareholder value unlocked thereafter as synergies are fully realized.

The transaction is subject to customary closing conditions, including regulatory clearance under the Hart-Scott-Rodino (HSR) Act. Both parties expect the deal to close by the end of the second quarter of 2026. Due diligence reportedly revealed a strong cultural alignment between the two organizations, with similar approaches to market strategy and key performance indicators, which is expected to facilitate a smooth and rapid integration of ENTRUST’s 3,100 professionals into the Leidos fold, creating a combined energy workforce of over 5,500 experts. This new, larger entity will be better equipped to tackle larger, more complex projects that are essential to rebuilding and securing the continent's energy backbone for the 21st century.