Leidos merger positions company for more health IT business worldwide, like Cleveland Clinic in Abu Dhabi
Leidos, which along with Cerner and Accenture, last year won a $9 billion contract to provide the Department of Defense with a new electronic health record at DoD facilities worldwide, has recently positioned itself gain even more healthcare business.
On August 16, Leidos closed on a $50 billion merger with Lockheed Martin's Information Systems and Global Solutions business. It paid Lockheed $1.8 billion in cash and gave Lockheed shareholders 50.5 percent of Leidos shares, worth $3.2 billion in Leidos stock.
Analysts noted the Lockheed IT acquisition brings Leidos new government customers such as the U.D. Departments, Homeland Security, FAA, DISA and the Social Security Administration.
Nick Wakeman, in his blog covering Washington D.C. technology, writes that Lockheed had been building its health IT business with acquisitions such as Systems Made Simple.
"So that should complement the extensive health IT related work Leidos does," he writes.
[Also: Leidos scores new military medical contract]
Indeed, Leidos CEO Roger Krone, speaking on an investor conference call on August 15 indicated one of its established clients, the Cleveland Clinic, might open doors for additional business in Abu Dhabi.
Cleveland Clinic operates a multi-specialty, 4.4 million square foot hospital in Abu Dhabi. The hospital on Al Maryah Island in Abu Dhabi opened in May 2015.
The merger, Krone said, provides the scale that makes pursuing new business in markets like Abu Dhabi doable.
"With this move, we are now big enough that we can open a field office in Abu Dhabi," Krone said on the investor call.
With the merger Leidos added three new members to the board, one with deep ties to healthcare: Surya Mohapatra, former CEO and chairman of Quest Diagnostics, who has held senior leadership positions in the healthcare industry for more than 30 years.
Susan Stalnecker, former vice president and treasurer of DuPont, and Gregory Dahlberg, former senior vice president for Lockheed Martin's Washington operations, also joined.
Post-merger Leidos is a 33,000-employee government services business with about $10 billion in annual sales, larger than any of its competitors, such as Booz Allen Hamilton, CACI International, SAIC and CSRA.
Twitter: @Bernie_HITN
Email the writer: bernie.monegain@himssmedia.com
