Chicago private equity firm Madison Dearborn Partners said Tuesday it has reached an agreement to sell Herndon’s LinQuest Corp. to Houston technology giant KBR Inc. for $737 million.
The all-cash transaction is expected to close by the fourth quarter, the companies said.
LinQuest specializes in digital transformation and other mission systems work in the national security sector. Its customers include the Space Force, Air Force and other Department of Defense and intelligence agencies. LinQuest said it has landed more than $850 million in contract awards in the past year.
It employs more than 1,500 workers across 13 U.S. offices, including other facilities in Odenton and Aberdeen, Maryland, and Warrenton, Virginia. Nearly three-quarters of LinQuest’s workforce hold security clearances, according to KBR.
Greg Young, LinQuest’s president and CEO, said in a statement the company has nearly tripled its headcount and quadrupled its earnings before interest, taxes, depreciation and amortization since it came under Madison Dearborn’s ownership in 2018.
He said KBR’s “expansive network and government technology expertise” will accelerate LinQuest’s growth across its core markets in the defense and intelligence communities.
KBR said the acquisition is in line with its strategy to delivery more high-end technology, expertise and mission capabilities to its customers. With complementary capabilities, KBR said the deal for LinQuest will create synergies across its portfolio and drive revenue growth.
KBR, which posted $6.96 billion in revenue last year, said it will fund the acquisition with a combination of cash and existing debt capacity.
The deal has been approved by KBR's board but remains subject to regulatory approval and other customary closing conditions.
Baird is serving as financial adviser to Madison Dearborn Partners and LinQuest in the deal, while Kirkland & Ellis LLP and Crowell & Moring LLP are providing legal counsel. Arena Strategic Advisors supported financial due diligence to KBR and Gibson, Dunn & Crutcher LLP is acting as its legal adviser.
