DOJ Sues Booz Allen Hamilton, Tries to Stop EverWatch Acquisition

The U.S. Department of Justice (DOJ) has filed a civil antitrust lawsuit to prevent Booz Allen Hamilton from acquiring government technology and national security consultancy EverWatch. However, Booz Allen says it strongly disagrees with the DOJ lawsuit.

Booz Allen reached an agreement to buy EverWatch in March 2022 from private equity firm Enlightenment Capital. The proposed purchase price is $440 million.

EverWatch is a full-service government solutions company. It offers cybersecurity, data science and intelligence solutions to the U.S. defense and intelligence community.

DOJ vs. Booz Allen: Point, Counter-Point on EverWatch

DOJ alleges that the pending Booz Allen-EverWatch deal violates Section 1 of the Sherman Act, since it allegedly reduces each company’s incentive to bid aggressively. It also states that the proposed transaction violates Section 7 of the Clayton Act, as it allegedly reduces competition.

In a prepared statement, Booz Allen dismissed the DOJ’s assertions:

“We strongly disagree with the Department of Justice’s characterization of the proposed $440 million, approximately 500-person EverWatch transaction. We believe the acquisition would bring together two companies with complementary capabilities to support our collective national security interests and would enhance competition overall in an industry that is highly competitive.”

Rather than harming innovation, Booz Allen said the EverWatch acquisition will accelerate the delivery of new capabilities:

“The transaction would accelerate technology development cycles and enable faster delivery of classified software development and analytics for national security clients, including AI, full-spectrum cyber operations, mission analytics, 5G, and TechSIGINT capabilities.”

Booz Allen: More Cybersecurity Acquisitions Coming?

Meanwhile, Booz Allen continues to closely evaluate potential cybersecurity acquisitions.

The company’s war chest from 2021 through 2025 includes $3.5 billion to $4.5 billion in total capital deployment that “prioritizes strategic acquisitions,” Booz Allen CEO Horacio Rozanski told Wall Street analysts during an earnings call on January 28, 2022, according to a SeekingAlpha transcript.

We’re watching to see if or how financial turbulence on Wall Street will influence Booz Allen’s acquisition strategy.

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