WASHINGTON — Booz Allen Hamilton, one of world’s largest defense contractors, disclosed in a court filing that its acquisition of “struggling” EverWatch values the supplier of artificial intelligence, cloud services, data science and insider-threat analysis at $440 million.
The figure and characterization, included in documents filed Sept. 23 with a district court in Maryland, shed light on a defense industry transaction the federal government alleges is anticompetitive and potentially harmful to national security. An underlying contract, known as Optimal Decision, was unexpectedly released for bidding by the National Security Agency earlier this month and is worth less than $17 million in profit over five years, according to the filings.
Booz Allen and EverWatch are thought to be the only serious contenders for the contract, which deals with simulation and signals intelligence.
“Booz Allen’s $440 million merger is not about [Optimal Decision]. It is about providing innovative solutions and improving competition for a wide array of procurements worth billions of dollars, many of which are currently dominated by larger entrenched incumbents,” according to a brief from the companies, filed after a hearing. “Put bluntly, EverWatch is struggling in the face of uncertainty, and Booz Allen’s $440 million investment in a transaction with EverWatch is being put at risk with every day of further delay.”
A spokesperson for Booz Allen confirmed the valuation Monday.
“Although we didn’t disclose terms at signing, we have since sized the deal publicly as $440 million so that number is correct,” Jessica Klenk, a company spokesperson, said in an email.
A telephone message left with EverWatch seeking comment was not immediately returned.
The U.S. Department of Justice in June sued to prevent Booz Allen from acquiring EverWatch. In its complaint, the government alleged the merger would imperil market competition, ultimately harming taxpayers, and crimp services provided to the NSA.
Attorneys for Booz Allen have told a federal court the merger, publicized in March, would accelerate technology development, among other benefits.
Booz Allen has also previously said the revenue generated by Optimal Decision pales in comparison to its grander goals and the price it was willing to pay for EverWatch, which is owned by Maryland-based investment firm Enlightenment Capital. EverWatch is much smaller than Booz Allen, the 22nd largest defense contractor by revenue in the latest Defense News ranking.
Colin Demarest is a reporter at C4ISRNET, where he covers military networks, cyber and IT. Colin previously covered the Department of Energy and its National Nuclear Security Administration — namely Cold War cleanup and nuclear weapons development — for a daily newspaper in South Carolina. Colin is also an award-winning photographer.