Anybody want to buy a piece of Lockheed Martin?
By Martha Entwistle
Updated Thu September 2, 2010
PeHub via Reuters is reporting that Lockheed Martin has a couple of pieces of the couple on the auction block, including its Enterprise Integration business, which could fetch as much as $1 billion.
EIG, which provides systems engineering and integration services, has attracted interest from several private equity firms including: Kohlberg Kravis Roberts and General Atlantic; Cerberus Capital Management; and Carlyle Group, the sources said.
So, does Lockheed just not like the systems integration business right now? Hard up for cash? Hardly.
The Pentagon drafted rules last year to remove potential organizational conflicts of interest within government contractors.
That has forced many defense companies including Lockheed Martin and Northrop Grumman to divest units that offer advisory services to government agencies on platforms that they end up bidding for.
Northrop Grumman cited the same issue when it sold its TASC Inc advisory services business for $1.65 billion to KKR and General Atlantic in November.
Much of this is certainly defense-oriented, but it would be interesting to have another large private equity player in the security marketplace, as they may indeed look to delver further into commercial marketplaces to grow the business.
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