SAIC to Acquire Federal Health IT Company Halfaker and Associates

Rhea-AI Summary

Science Applications International Corp. (NYSE: SAIC) announced a definitive agreement to acquire Halfaker and Associates, LLC for $250 million. This acquisition aims to expand SAIC’s digital transformation portfolio, enhancing their services for federal government customers, particularly in health IT. The deal is expected to be accretive to revenue growth in fiscal year 2022, funded through cash on hand and debt. The transaction is anticipated to close by the end of SAIC's second fiscal quarter of 2022.

Positive

• Acquisition enhances SAIC's digital transformation capabilities.
• Expected to accelerate profitable growth and access to strategic customers.
• Brings diverse talent and strengthens offerings in health IT.

Negative

• None.

Science Applications International Corp. (NYSE: SAIC) announced today that it has entered into a definitive agreement to acquire Halfaker and Associates, LLC, a leading federal health technology solutions provider, for $250 million, growing the company’s digital transformation portfolio.

Halfaker is headquartered in Arlington, Virginia, with an Agile Delivery Center in Clearwater, Florida. The company is known for its ability to create, modernize, integrate, and secure mission critical systems for federal government customers. Halfaker has a strong culture of service, rooted in the desire to make a difference in the lives of its community, veterans, and wounded warriors.

“This acquisition reinforces SAIC’s commitment to supporting the government healthcare mission, including our strong support for the health and wellbeing of veterans. It further accelerates SAIC’s profitable growth, brings key diverse talent, and offers access to strategic customers and contract vehicles within health IT for the DOD and federal government,” said SAIC CEO Nazzic Keene. “Halfaker is a strong cultural fit with mission-focused talent, and enhances our ability to support our customers’ digital transformation needs and positions SAIC to be an innovative technology solutions provider into the future.”

“I am excited to embark on this next chapter of Halfaker’s mission to continue to serve,” said Halfaker President and CEO Dawn Halfaker. “The alignment of SAIC’s culture and values with this important mission has been critical in making the decision to join forces and successfully bolster the services we provide our customers with even greater digital transformation capacity and scalability. This acquisition enables our delivery teams to maintain our customer-centric focus while exponentially increasing our ability to provide the technical depth and top technical talent needed to meet the government’s most pressing challenges.”

Strategic Alignment to Digital Transformation

Halfaker brings advanced end-to-end digital solutions that further transform and empower customer decision-making through modernization and optimization. Halfaker is an established, leading provider of digital services, data analytics, cybersecurity, and cloud solutions to the Department of Veterans Affairs (VA), Department of Defense, Department of Health and Human Services, the Centers for Medicare and Medicaid services, and other notable customers. Halfaker is also a top 5 IT provider by awarded task orders on the VA’s Transformation Twenty-One Total Technology Next Generation (T4NG) acquisition program.

Together, SAIC and Halfaker’s solutions strengthen the company’s robust digital transformation portfolio in areas such as DevSecOps, digital engineering, automation, and process improvement.

Transaction Details

SAIC expects the transaction to be accretive to its revenue growth rate, adjusted diluted earnings per share, and free cash flow in fiscal year 2022. SAIC expects to fund the $250 million cash transaction through a combination of cash on hand and incremental debt.

The transaction is expected to close by the end of SAIC’s second quarter of fiscal year 2022, ending July 30, 2021, subject to customary closing conditions.

Advisors

Robert W. Baird & Co. acted as the exclusive financial advisor to Halfaker and Associates on this transaction, and Crowell & Moring LLP served as legal counsel. King & Spalding LLP served as legal counsel to SAIC.

About SAIC

SAIC® is a premier Fortune 500® technology integrator driving our nation’s technology transformation. Our robust portfolio of offerings across the defense, space, civilian, and intelligence markets includes secure high-end solutions in engineering, digital, artificial intelligence, and mission solutions. Using our expertise and understanding of existing and emerging technologies, we integrate the best components from our own portfolio and our partner ecosystem to deliver innovative, effective, and efficient solutions that are critical to achieving our customers' missions.

We are more than 26,000 strong; driven by mission, united by purpose, and inspired by opportunities. Headquartered in Reston, Virginia, SAIC has annual revenues of approximately $7.2 billion.​​​​ For more information, visit saic.com. For ongoing news, please visit our newsroom.

Forward-Looking Statements

Certain statements in this release contain or are based on “forward-looking” information within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “guidance,” and similar words or phrases. Forward-looking statements in this release may include, among others, estimates of future revenues, operating income, earnings, earnings per share, charges, total contract value, backlog, outstanding shares and cash flows, as well as statements about future dividends, share repurchases and other capital deployment plans. Such statements are not guarantees of future performance and involve risk, uncertainties and assumptions, and actual results may differ materially from the guidance and other forward-looking statements made in this release as a result of various factors. Risks, uncertainties and assumptions that could cause or contribute to these material differences include those discussed in the “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Legal Proceedings” sections of our Annual Report on Form 10-K, as updated in any subsequent Quarterly Reports on Form 10-Q and other filings with the SEC, which may be viewed or obtained through the Investor Relations section of our website at saic.com or on the SEC’s website at sec.gov. Due to such risks, uncertainties and assumptions you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. SAIC expressly disclaims any duty to update any forward-looking statement provided in this release to reflect subsequent events, actual results or changes in SAIC’s expectations. SAIC also disclaims any duty to comment upon or correct information that may be contained in reports published by investment analysts or others.

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FAQ

What is the significance of SAIC's acquisition of Halfaker?

The acquisition enhances SAIC's digital transformation portfolio, particularly in health IT, allowing for better service delivery to federal customers.

How much did SAIC pay for Halfaker?

SAIC agreed to acquire Halfaker for $250 million.

When is the transaction expected to close?

The transaction is expected to close by the end of SAIC's second fiscal quarter of 2022.

How will the acquisition impact SAIC's financial performance?

SAIC anticipates the acquisition will be accretive to revenue growth, adjusted diluted earnings per share, and free cash flow in fiscal year 2022.

What are Halfaker's key strengths?

Halfaker is known for its advanced digital solutions, cybersecurity, and strong relationships with federal agencies, especially the Department of Veterans Affairs.