Huntington Ingalls Industries, Inc. (NYSE: HII) is intending to purchase Alion Science and Technology. The firm has disclosed that it has inked a definitive agreement to purchase Alion Science and Technology for $1.65 billion in cash from Veritas Capital, dependent on customary adjustments. Alion has gained recognition as a high value-added, technology-driven solutions offeror for the global defense marketplace.

Alion offers sophisticated engineering and R&D services in the areas of ISR, military training and simulation, cyber, data analytics, and other modern technology-based solutions to the DOD and intelligence community customers, with the U.S. Navy, signify about one-third of current annual revenues.

Furthermore, Alion is ready for sustainable strong growth with over $3 billion in excess today. It has more than $5 billion in projected contract value and a strong opportunity pipeline. Alion has more than 3,200 workers with more than 80% of employees retaining security clearances.

Additionally, the deal between Huntington Ingalls and Alion Science signifies an enterprise value-to-expected 2022 adjusted EBITDA1 multiple of nearly 12.2x. Alion will become an integral part of Huntington Ingalls Industries Technical Solutions division. The deal is expected to execute in the second half of 2021, dependent on traditional execution conditions.

This acquisition will offer strategic benefits which include highly harmonizing skills and customer access in priority growth markets associated with future U.S. Navy and DOD customers. This deal will create a $2.6B+ revenue products and solutions business. Moreover, this deal is anticipated to be considered cash flow profitable in fiscal 2022 and GAAP EPS accretive in fiscal 2023.