M&A
Leidos trades control of its security screening business for a 41.5% Analogic stake
Altaris affiliates hold 58.5% of the Analogic joint venture and appoint a majority of its board. Certain Leidos liquidity demand exit rights begin only after seven years.
Leidos on Oct. 5 closed the combination of its Security Enterprise Solutions (SES) and Industrial Automation businesses with Analogic, a portfolio company of investment firm Altaris1. The venture operates under the Analogic brand and focuses on security screening at airports, borders and critical infrastructure2. Leidos contributed its businesses in exchange for 41.5% of the venture's equity. Altaris affiliates put in part of Analogic's parent for 58.5% and sold the rest of that parent to the venture for cash the venture obtained from new debt financing1.
Altaris controls the Analogic venture; Leidos holds a 41.5% minority stake
Equity in the Analogic security screening joint venture at closing, Oct. 5, 2026, %
100% of joint venture equity
- 58.5% Altaris affiliates
- 41.5% Leidos
Altaris affiliates appoint a majority of the board. Certain Leidos liquidity demand exit rights start only after seven years, subject to limits.
Source: Leidos Form 8-K, Oct. 5, 2026; Leidos Form 10-Q for the quarter ended July 3, 2026. Data as of Oct. 5, 2026.
Altaris holds the controlling interest; Leidos's 41.5% is non-controlling1, 4. Leidos's say now runs through the minority of board seats it initially designates and customary minority protective rights over certain material proposed actions. The exit terms include Altaris's drag-along rights and Leidos's tag-along rights1. Certain Leidos liquidity demand exit rights start only after the seventh anniversary of closing. All of these terms are subject to timing, procedural and other limits in the joint venture agreement1.
By revenue, the contributed business is a small piece of Leidos. In its April announcement of the deal, Leidos said it would contribute about 1,500 employees representing $625 million in projected 2026 revenue3. That revenue is about 3.6% of the $17.2 billion Leidos reported for its last fiscal year2. The 10-Q says the divestiture is not a material strategic shift, so the business will not be presented as a discontinued operation4. Chief Executive Officer Tom Bell said the launch "sharpens our focus on the growth engines driving our NorthStar 2030 strategy"2.
Before any exit, cash from the stake depends on an Altaris-majority board, which decides when the venture distributes its available cash, at least once a year1. Leidos's first financial statements covering a period that includes Oct. 5 will show the business deconsolidated and the 41.5% carried as an equity method investment1, 4.
Clarification, October 7, 2026: The headline changed from “Leidos combines Security Enterprise Solutions with Altaris's Analogic, keeping a 41.5% minority stake” to “Leidos trades control of its security screening business for a 41.5% Analogic stake”. The summary now reads: “Altaris affiliates hold 58.5% of the Analogic joint venture and appoint a majority of its board. Certain Leidos liquidity demand exit rights begin only after seven years.” Revision notice clarified October 11, 2026.
Sources (4)
- Leidos Holdings, Form 8-K, Oct. 5, 2026 www.sec.gov
- Leidos press release, Exhibit 99.1, Oct. 5, 2026 www.sec.gov
- Leidos press release, Exhibit 99.1, April 15, 2026 www.sec.gov
- Leidos Holdings, Form 10-Q for the quarter ended July 3, 2026 www.sec.gov