Lockheed Martin to Diversify with Health IT Firm Acquisition
Lockheed Martin Corporation (LMT) announced that it will acquire Systems Made Simple, a New York-based privately-held company, which provides the U.S. government with health information technology (IT) solutions.
The acquired company will be a part of Lockheed Martin’s Information Systems and Global Solutions segment. The transaction is expected to close within 30 days.
Systems Made Simple deals primarily with the Department of Veterans Affairs (:VA). It provides technology and service solutions in the field of health data analytics, health data management and health system interoperability. The services provided by the company, thus, enable smooth flow of information between patients, providers and the payers.
Lockheed Martin’s Information Systems and Global Solutions segment will witness significant traction from the acquisition. The segment needs a major overhaul to boost its revenues. It had suffered a 5% loss in revenues in the third-quarter of 2014 coupled with a 6% year-over-year decline in operating profits.
The acquisition will solidify Lockheed Martin’s ties with the VA. Apart from accelerating growth in the Information Systems and Global Solutions segment, it will also broaden the company’s health IT portfolio. It will enable the company to diversify its operations, thereby boosting its revenue while the cloud of sequestration looms over the defense industry.
Recently, Lockheed Martin has been focusing on diversifying its business operations. In Aug 2014, it completed the acquisition process of Astrotech Space Operations, which was integrated into the Space Systems segment. In Jun 2014, it had acquired Deposition Sciences Inc., a subsidiary of Advanced Lighting Technologies Inc. Deposition Sciences, a thin-film coatings supplier, was integrated into the Aeronautics segment.
Lockheed Martin is the largest U.S. defense contractor, contending with major players like The Boeing Co. (BA), Northrop Grumman Corp. (NOC) and General Dynamics Corp. (GD). The company’s products guarantee a steady inflow of follow-on orders from its leveraged presence in the Army, Air Force, Navy and IT programs. Its diverse product offerings bring a consistent inflow of contracts from the U.S. DoD and allied countries.
Lockheed Martin currently holds a Zacks Rank #3 (Hold).
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