WASHINGTON — Services contractor Amentum said Tuesday it has closed its $1.9 billion acquisition of PAE, marking the contractor’s latest move to subsume its rivals.
Amentum said it paid $1.9 billion in cash, including assuming some debt and certain fees.
Amentum was the 23rd-largest defense firm in 2021, according to Defense News’ Top 100 rankings, while PAE was 80th. Both firms are services contractors.
The merger comes as the U.S. government has become increasingly wary of industry consolidation, amid concerns mergers could hurt competition and increase sourcing risk. Lockheed Martin recently abandoned its attempt to acquire Aerojet Rocketdyne after the Federal Trade Commission filed a lawsuit to stop it on antitrust grounds.
But consolidation among services contractors have typically been viewed differently by the government because there are more competitors and the barriers for entry are lower.
In November 2020, Amentum acquired competitor DynCorp International, moving it from 46th on the Top 100 list in 2020 up to 23rd in 2021.
Amentum announced the PAE deal in October, and PAE’s stockholders approved it at a special meeting Feb. 10. Trading on PAE’s stock was suspended before the opening of business Tuesday, and it will be delisted from the Nasdaq stock exchange.
Stephen Losey is the air warfare reporter for Defense News. He previously covered leadership and personnel issues at Air Force Times, and the Pentagon, special operations and air warfare at Military.com. He has traveled to the Middle East to cover U.S. Air Force operations.
