Alcatel-Lucent will sell its wholly-owned subsidiary LGS Innovations LLC to investor groups Madison Dearborn Partners and CoVant for $200 million.
LGS Innovations was formed during the Alcatel and Lucent merger as a subsidiary to provide networking and communications solutions to the U.S. federal government, due to requirements on foreign ownership and investment. LGS focuses on secure communications and networking, as well as research and development in photonics, remote sensing, microtechnology and cybersecurity.
Madison Dearborn is a Chicago-based private equity firm, and CoVant is a holding company based on Virginia that focuses on acquiring companies in the federal technology solutions arena. The transaction is expected to close in the first quarter of 2014, pending regulatory approval.
Kevin Kelly, CEO of LGS Innovations, said that the sale “will better enable us to serve our customers in the civilian, defense and advanced programs communities by doing what we do best — researching, developing and deploying secure networking and communications solutions. We are also excited that with new ownership comes an opportunity to apply our cutting-edge research to a new set of challenges.”
According to a company statement, “the sale to a U.S.-based company owned by Madison Dearborn/CoVant investor group will allow LGS Innovations to address markets and customers that previously were difficult to pursue under the company’s and its current parent’s security agreements with the U.S. government. In addition, LGS Innovations will now be able to take Alcatel-Lucent’s products and services to a broader market to include the U.S. state and local government markets, the public safety and first responder community, foreign governments, and commercial enterprises.”
LGS Innovations participated in an early trial project of a Band 14 public safety network in Hawaii several years ago, similar to the type of network that the First Responder Network Authority, or FirstNet, has been tasked to build nationwide.
LGS will remain the exclusive reseller of ALU products and services to the U.S. federal government, as well as in sales to the integration and reseller market where the federal government is the end customer.
LGS is headquartered in northern Virginia and employs nearly 700 people. It has major facilities in Florham Park, N.J.; Westminster, Colo.; High Point, N.C.; and Lisle, Ill. All employees and facilities will transfer to the new ownership, the company reported.
