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BlueHalo sale narrows to small strategic group, sources say

The sale process for BlueHalo, an Arlington Capital Partners-backed defense engineering company, has narrowed to at least two remaining strategics, said three sources familiar with the matter.

The auction process for the Arlington, Virginia-based company is at a late stage, the three sources said, noting it is past management presentations. BlueHalo was targeting strategic buyers in its sale process, as reported.

This news service reported last month that defense companies L3Harris Technologies [NYSE:LHX] and Leidos [NYSE:LDOS] were among the strategic buyers circling BlueHalo.

L3Harris is among those that remain in the mix, the three sources said. Two of these sources said Leidos is also there.

BlueHalo mandated Jefferies and Robert W. Baird as its financial advisors, as reported by this news service in May. It was further reported that Arlington Capital was reviewing strategic options for BlueHalo, including a sale or IPO. A report by this news service in June noted an IPO may not be as attractive given the uncertain public market conditions. 

BlueHalo is marketing itself at around USD 150m in EBITDA, as reported.

It was also reported in June that other potential buyers could include defense and services companies such as CACI International [NYSE:CACI], Lockheed Martin [NYSE:LMT] and Northrop Grumman [NYSE:NOC]. 

BlueHalo was formed in October 2020 through the combination of AEgis Technologies, Applied Technology Associates and Brilligent Solutions. The company provides products and services in the areas of space superiority, space technology, directed energy/counter-unmanned aerial systems (c-UAS), autonomy, advanced radio frequency (RF), cyber, and signals intelligence (SIGINT). 

Since inception, BlueHalo has made a number of acquisitions, including the December 2020 purchases of Base2 and Fortego. In 2021, BlueHalo bought Development Engineering Services Corporation, Intelligent Automation Systems, Citadel Defense and Asymmetrik. The deal values for these transactions were not disclosed. 

Jefferies, L3Harris and Leidos declined to comment. Arlington Capital Partners, BlueHalo and Baird did not return requests for comment.