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CHANTILLY, Va. - Amentum, a global technology and engineering firm with annual revenue of $9.8 billion and a market capitalization of $4.7 billion, has reached a definitive agreement to divest its hardware and product segment, Rapid Solutions, to aerospace and defense contractor Lockheed Martin for $360 million in cash. This strategic move is aimed at reinforcing Amentum’s focus on mission-critical services and positioning it as a pure-play provider of advanced engineering and technology-enabled solutions. According to InvestingPro analysis, the company appears undervalued at its current trading price.
Rapid Solutions, which contributes around 1% to Amentum’s annual revenue and adjusted EBITDA, specializes in manufacturing products that support national security missions, including ISR (Intelligence, Surveillance, and Reconnaissance), advanced communications, and tactical systems. As part of the transaction, approximately 230 employees from Rapid Solutions will join Lockheed Martin.
Adam Harrison, Senior Vice President of Strategy and Corporate Development at Amentum, stated that this divestiture sharpens the company’s focus on its core services. The sale is expected to close in the second half of 2025, subject to customary regulatory approvals and closing conditions. Amentum anticipates that the deal will result in roughly $325 million in after-tax proceeds, which will be used to accelerate debt reduction efforts. The debt reduction initiative comes at a crucial time, as InvestingPro data shows the company’s total debt stands at $4.7 billion, with a debt-to-equity ratio of 1.05.
Further details regarding the transaction’s financial implications will be discussed during Amentum’s Second Quarter Fiscal Year 2025 earnings conference call, scheduled for May 7, 2025.
Amentum is recognized as a leader in providing innovative solutions across a broad spectrum of sectors, including science, security, and sustainability. The company boasts a workforce of over 53,000 employees operating in about 80 countries across seven continents.
This news is based on a press release statement. It should be noted that forward-looking statements in the release involve risks and uncertainties, including the realization of after-tax proceeds and the timing of the transaction’s closure. These statements are not guarantees of future performance and are subject to various factors that could cause actual results to differ materially from expectations. For deeper insights into Amentum’s financial health and growth prospects, InvestingPro subscribers have access to over 30 additional financial metrics and exclusive analysis tools.
In other recent news, Amentum Holdings Inc. has been awarded a significant $247.6 million contract by the U.S. Department of Defense Air Combat Command. This contract will involve the use of artificial intelligence and machine learning tools to support counter-narcotics and anti-terrorism efforts, emphasizing the company’s role in addressing national security challenges. Additionally, the merger between Amentum and Jacobs’ Critical Mission Solutions and Cyber & Intelligence units has reached its final adjustments, with Jacobs receiving $70 million and a 3% stake in Amentum. This merger has positioned Amentum as a key player in the government services sector.
In terms of market analysis, BTIG has initiated coverage on Amentum with a Buy rating and a $30 price target, citing the company’s diversified exposure as a strategic advantage. Conversely, Morgan Stanley has given Amentum an Underweight rating, expressing concerns over potential revenue risks from possible Department of Defense budget cuts. Goldman Sachs has started coverage with a Neutral rating and a $21 price target, noting Amentum’s lower growth and margins compared to its peers but acknowledging opportunities for reinvestment and margin improvement. These recent developments provide investors with diverse perspectives on Amentum’s market position and future prospects.
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