Leidos Holdings Inc., a contractor based in Reston, Virginia, has announced a strategic acquisition that marks a significant expansion into the U.S. energy infrastructure market. On Monday, the company revealed plans to acquire ENTRUST Solutions Group, a specialized engineering services firm, in a deal valued at $2.4 billion, to be paid entirely in cash. This acquisition is positioned to capitalize on increasing utility sector spending aimed at modernizing the national electrical grid and enhancing infrastructure resilience.
The agreement involves Leidos purchasing ENTRUST from Kohlberg, a private equity firm, thereby broadening its reach within regulated utility markets and augmenting its engineering capabilities on a national scale. The acquisition is set to substantially grow Leidos' existing energy infrastructure engineering segment, which currently generates approximately $600 million in annual revenue.
ENTRUST brings a wealth of expertise spanning the electric and gas utility sectors, including services related to power generation, transmission, and distribution. This expanded expertise allows Leidos to extend its exposure across the entire power delivery value chain, aligning with growing demands within the industry.
Context Behind the Timing
The U.S. utility industry is increasingly confronted with the urgent need to update aging electrical systems, reinforce infrastructure to withstand extreme weather events, and accommodate rising electricity consumption. These industry challenges are driving sustained capital investments, underscoring utility engineering as a sector with both stability and growth potential.
Leidos’ CEO, Tom Bell, emphasized the strategic nature of the acquisition, stating, “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.” This statement highlights the company’s intent to align growth objectives with broader infrastructure needs facing the country.
Financial Expectations and Deal Timeline
The company expects the acquisition to be immediately accretive in terms of revenue growth and adjusted EBITDA margin, with earnings accretion anticipated starting in 2027. Leidos has outlined a plan to finance the purchase through a combination of debt instruments and existing liquidity. The deal is subject to regulatory approvals and is projected to close by the end of the second quarter of 2026.
As context on its financial position, Leidos reported holding $974 million in cash and cash equivalents as of October 3, 2025, indicating a solid liquidity base to support the transaction funding.
Market Reaction
Shares of Leidos Holdings (NYSE: LDOS) closed slightly lower by 1.15 percent at $191.23 on the last trading day prior to the announcement, reflecting investor consideration of the company’s new strategic direction and financial commitments.
Summary and Outlook
Leidos’ acquisition of ENTRUST Solutions Group represents a pivotal expansion into the regulated utility engineering sector, positioning the company to benefit from ongoing national investments in energy infrastructure. By integrating ENTRUST’s expertise across the electric and gas utilities value chain, Leidos aims to reinforce its market position and leverage growing capital expenditures focused on grid modernization and resilience enhancement. Moving forward, the transaction is projected to enhance revenue and profitability metrics while advancing Leidos’ strategic growth aims within a critical infrastructure domain.