Money moves

Va. companies make big buys, score billion-dollar contracts

Published March 1, 2020 by Kate Andrews

In September 2019, Tysons-based Park Hotels & Resorts Inc. completed its $2.5 billion purchase of Chesapeake Lodging Trust, the largest acquisition in the state last year. Park’s hotel portfolio now includes 66 properties with more than 35,000 rooms, and the company has expanded into San Francisco, Boston, Miami, Los Angeles and other leading markets.

Another notable deal last year was GateHouse Media’s $2.3 billion merger with McLean-based Gannett Co., forming the largest newspaper company in the country and continuing the consolidation of the media industry. Gannett, the parent company of USA Today, and its 100 dailies now belong to a combined company under the Gannett name with New Media Investment Group, owner of GateHouse’s media properties. After the approval of the deal in November, one in five U.S. newspapers belong to the Gannett group.

In June, Tysons-based DXC Technology acquired Luxoft Holding Inc., a software engineering and digital strategy firm, for more than $2 billion, after announcing the deal last January.

DXC has had an active two years, spinning off the federal contractor now known as Perspecta Inc., which has provided network services to the Navy but recently lost that contract to another Fairfax County company, Leidos Holding Inc.

In December 2019, Leidos purchased Dynetics Inc., an aerospace and defense company, for $1.65 billion, and in February, the company announced the $1 billion purchase of L3Harris Technologies’ Security & Detection Systems and MacDonald Humfrey Automation. Two days later, the Navy awarded Leidos its $7.73 billion NGEN-R contract to update the Navy Marine Corps Intranet and provide other IT services. Also in December, the Reston-based company received a $6.52 billion contract from the Department of Defense for IT services and a joint award for the   $4 billion Hanford Mission Essential Services Contract.

In Hampton Roads, the big news was a pair of massive Naval Sea Systems Command (NAVSEA) contracts. In November, Reston-based General Dynamics Corp. won the largest Navy contract ever awarded, $22.2 billion, to produce nuclear submarines. (See story here.) It’s a deal that benefits the company’s Electric Boat unit as well as Huntington Ingalls Industries’ Newport News Shipbuilding, which was also awarded a $14.9 billion contract to produce nuclear-powered aircraft carriers for the Navy.

Newport News Shipbuilding, which has hired about 10,000 people since 2016, is expected to deliver five submarines between 2025 and 2029. NNS works with General Dynamics’ Electric Boat, based in Rhode Island, to manufacture different elements of the attack submarines, which are later assembled.

Another potential deal that may have a considerable butterfly effect is Ethos Capital’s $1.135 billion purchase of the Public Interest Registry, a Reston-based not-for-profit created by the Internet Society in 2002 to manage the .org domain. Some tech experts worry that the proposed sale to a private equity firm could raise costs for nonprofit organizations using the .org domain, especially since the Internet Corporation for Assigned Names and Numbers (ICANN) approved a contract last June to eliminate the .org domain price cap of $9.93 a year.

Ethos, founded by Erik Brooks, the former managing partner of investment fund Abry Partners, has said it will not raise prices by more than 10% a year. In late January, ICANN delayed a decision to deny or allow the sale until April, following a request by California’s attorney general.

CHARTS:

• Largest public companies*
• Virginia companies on the Black Enterprise 100
• Inc. 500 companies located in Virginia
• Largest private companies* 
• Defense contracts
• Mergers & acquisitions

*Partial list – full lists available for purchase at VirginiaBusiness.com/lists.