Leidos Acquires ENTRUST for $2.4 Billion
Leidos acquires ENTRUST, doubling its energy unit; the all-cash $2.4 billion deal raises financing and integration risk and may sway trader positioning.
KEY TAKEAWAYS
- Acquires ENTRUST in an all-cash $2.4 billion deal that doubles Leidos' energy infrastructure engineering unit.
- Adds 3,100 professionals and expands capacity across generation, transmission, and distribution.
- Funded with new debt, cash on hand, and commercial paper; closing expected by end of Q2 2026.
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Leidos Holdings agreed on Jan. 26, 2026, to acquire ENTRUST Solutions Group from Kohlberg & Co. The transaction doubles Leidos’s energy infrastructure engineering business and will be immediately accretive to revenue and adjusted EBITDA margin.
Deal Terms and Strategic Impact
The all-cash purchase will be funded with new debt, cash on hand, and commercial paper. The companies expect to close the deal by the end of the second quarter of 2026, subject to customary closing conditions, including regulatory approvals. Kohlberg acquired ENTRUST in 2019 and completed a minority recapitalization in 2023. Leidos retained Citi as financial adviser, Davis Polk & Wardwell for legal work, and PwC for accounting. Kohlberg and ENTRUST engaged Houlihan Lokey and Perella Weinberg on financial matters, Ropes & Gray on legal, and KPMG on accounting.
ENTRUST adds more than 3,100 professionals across over 40 North American locations, offering engineering, consulting, design, asset integrity, data solutions, and automation services to utilities, operators, and industrial customers. The acquisition expands Leidos’s capacity across generation, transmission, and distribution. Combined, the companies will have about 5,500 energy professionals.
Leidos said the deal expands its $600 million energy infrastructure engineering unit, which has posted double-digit revenue growth and strong margins over the past eight years. The transaction will be accretive to non-GAAP diluted EPS in 2027 and supports Leidos’s NorthStar 2030 strategy, positioning the company to tap into a projected $1 trillion U.S. utilities investment in grid modernization. Tom Bell, Leidos’s chief executive, said, "ENTRUST's engineering capabilities and customer base perfectly complement ours." The company flagged risks including integration challenges, financing completion, regulatory delays, U.S. government budget uncertainty, inflation and interest-rate pressure, cybersecurity, and broader economic conditions.
