Northrop Grumman, Logicon pool IT resources

In the latest case of consolidation in the defense industry Northrop Grumman Corp. and Logicon Inc. last week inked a merger agreement under which the companies plan to combine their federal information technology businesses into a single division of Northrop Grumman.

The stock-for-stock transaction which is expected to close within 60 to 75 days will result in the creation of the Logicon Information Technology Division. That division to be based in Torrance Calif. will unite Logicon's business with "substantial elements" of Herndon Va.-based Northrop Grumman Data Systems and Services Division (DSSD) according to a statement from Northrop Grumman. Logicon officials could not be reached for comment.

The division will be led by Jack Woodhull the chief executive officer of Logicon. Herb Anderson general manager of DSSD will be deputy general manager of the division.

The Logicon Information Technology Division would have revenue of about $910 million. Logicon expects to post revenue in excess of $560 million for its 1997 fiscal year ended March 31 while Northrop Grumman DSSD reported federal IT revenue of $350 million for 1996.

Logicon has business in such Defense-related fields as command control communications and intelligence and battlefield management. In fiscal 1996 about a third of Logicon's business was in C3I the company's largest business segment. A spokesman for Northrop Grumman said the company was attracted to Logicon's "particularly strong capabilities" in C3I and battlefield management.

Logicon's federal contract stable includes DOD's Integrated Computer-Aided Software Engineering pact which provides a central source for Common Operating Environment-compliant software. And in a recent award Logicon emerged as the sole large-business contractor on a $610 million multiple-award program with the Defense Information Systems Agency's Joint Interoperability and Engineering Organization.

In addition to its IT work Logicon also has business in weapons systems and conducts research and experimentation in such fields as high-energy lasers.

Northrop Grumman DSSD has captured roles on more than a dozen indefinite-delivery indefinite-quantity services contracts including prime contracts on the National Institutes of Health's Chief Information Officer Solutions and Partners pact and the Transportation Department's Information Technology Omnibus Procurement.

The company is also the prime contractor on the Internal Revenue Service's Service Center Recognition/Image Processing System.

Logicon also has a role with the IRS. Logicon has a systems engineering and integration pact with the agency to support the Tax Systems Modernization.

In a recent interview Anderson said DSSD is aiming to become a $1 billion player in the federal IT market by 2002. The Logicon merger will allow the Northrop Grumman division to meet that objective almost immediately as part of Logicon's Information Technology Division.

The Northrop Grumman spokesman said Logicon will take the lead role in the IT division because of its "focus on the Defense IT market" and because it is larger than DSSD. He added however that both companies are in "growth mode."

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