Northrop Grumman is looking to sell TASC, its unit that advises military and intelligence agencies in a deal that could be worth up to $1 to $2 billion.
The Department of Defense has tightened its conflict-of-interest rules this year as ordered by Congress on firms like Northrop’s TASC. Many contractors offer services to government agencies on programs they end up bidding on, which creates the conflict of interest. According to Jim McAleese, a defense-industry consultant, this may be the reason Northrop is shopping this unit of their company.
“It would be prudent for Northrop to shift these resources to a growth market,” said McAleese, of McAleese & Associates.
Northrop has enlisted Goldman Sachs Group Inc. and Credit Suisse Group AG to seek offers for the division. Reportedly, potential buyers include private-equity firms Carlyle Group, Kohlberg Kravis Roberts & Co. and Blackstone Group LP.
TASC became part of Northrop in 2001, when the company acquired Litton Industries Inc. Northrop’s TASC division provides systems engineering and technical assistance services and advising for government agencies.