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L-3 Communications spinoff Engility moving to Chantilly

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Engility Holdings, a newly created government services spinoff of L-3 Communications, will relocate from Alexandria to Chantilly after receiving $350,000 from a Virginia state economic development fund.

Engility provides systems engineering, training and other services to the Defense Department and other government agencies. L-3, based in New York, announced that it would spin the company off in July 2011 in order to focus on high-tech sectors.

L-3 develops communications and intelligence equipment, including a broad range of electronic systems. Engilty’s services niche, however, has increasingly become a lower-margin business where price wins a contract.

Michael T. Strianese, L-3’s chairman, president and chief executive, said in announcing the new business last summer that separating the unit would remove drag from L-3’s growth rate and margins. L-3 employs 61,000 employees worldwide and reported 2011 net sales of $15.2 billion.

Engility will relocate to Chantilly space currently occupied by L-3 with the aid of a $350,000 grant from the Virginia Economic Development Partnership, a state economic development fund.

Virginia Gov. Robert F. McDonnell (R) announced the deal April 26. Engility has about 9,200 employees worldwide and reported $2.2 billion in 2011 sales. In the Chantilly area, the newly stand-alone company is expected to invest $6.5 million in its new headquarters and grow from 300 to 350 employees.

McDonnell said in a statement that he met with L-3 officials in Canada and New York about the deal and that the state competed with Maryland to land Engility. “L-3 Communications already has a strong presence in Virginia that Engility Corp. will maintain and continue to build on,” he said.

Tony Smeraglinolo, L-3 executive vice president, will become Engility’s chief executive. He previously served as president of the L-3 Services Group’s Intelligence Solutions Division.

“We are very appreciative of Gov. McDonnell, the commonwealth and Fairfax County for this strong show of support,” Smeraglinolo said in a statement. “Our existing relationship with Virginia provides a solid foundation from which to launch our exciting future and enables us to fulfill our commitment to support our customers’ missions.”

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