Lockheed completes exit from Aussie IT market

The merger of Lockheed Martin’s cast-off IT services business with defence contractor Leidos has officially wrapped up, marking the global military brand's disappearance from the local tech market.

Lockheed flagged the sale of its information systems and global solutions (IS&GS) division in the middle of 2015, with rival multinational Leidos Holdings throwing a bid of around US$5 billion (A$6.6 billion) into the ring to take over the IT operations several months later.

The deal has now formally gone through via a tax-friendly Reverse Morris Trust merger, taking just over a week ago.

It means the US-headquartered Leidos - which sells about US$10 billion worth of science and technology services into defence, intelligence and civil and health markets each year - will now officially take over Lockheed’s operations, primarily in the Australian public sector.

Lockheed’s roughly 750 Australian staff will join their new parent’s 33,000 existing global employees.

The completed merger means the two Australian government mega-deals Lockheed held with the Australian Taxation Office and Department of Defence have now officially changed hands.

Defence signed a $710 million contract for centralised processing services with Lockheed Martin in 2014.

A spokesperson for the department confirmed that a deed of “assignment, assumption and consent” was signed at the end of July that formally transferred the deal to Leidos.

“This transfer has had no impact on the services delivered under the centralised processing contract,” the spokesperson said.

The ATO has more than $500 million worth of end user computing and support services work with Lockheed, which formally came under the umbrella of the Leidos group on August 17.

A spokesperson for the ATO similarly stressed “there is no change to the scope of services and personnel”.

Lockheed’s Australian IT deals are all likely to now fall under the moniker of Abacus Innovation Australia, the subsidiary created by Lockheed Martin to facilitate the merger.