SAIC moves forward in company split


Lou Von Thaer is the new head of Leidos's national security business. (RISDON PHOTOGRAPHY)
May 12, 2013

McLean-based Science Applications International Corp. took two more key steps in its split last week, agreeing to sell its Tysons Corner headquarters and hiring a former General Dynamics executive to lead the national security sector within the larger of its two future companies.

The contracting giant announced late last summer that it would split into two public companies — a government services company that will retain the SAIC name and a technology company that will be called Leidos, clipped from the word kaleidoscope.

Last week, SAIC said it has reached an agreement with the Bethesda-based Meridian Group to conduct a multi-year transaction to sell about 18 acres of land, including four office buildings comprising about 900,000 square feet, a parking garage and surface parking lots.

The business retaining the SAIC name plans to lease one of the buildings for its headquarters.

In an interview last week, K. Stuart Shea, chief operating officer of the still-whole SAIC who will be president and COO of Leidos, said the company decided it didn’t make sense to keep both companies on the Tysons Corner campus.

The choice to keep SAIC on the site was partly a branding decision, Shea said; SAIC Drive is the name of one of the streets at the site.

Leidos will remain in Northern Virginia, and company executives are focusing on the Reston area for a new headquarters.

The company has looked at facilities in Reston, Herndon and Springfield, Shea said.

“The buildings that are open today in that area range in size from 50,000 square feet to 300,000 square feet,” he said. The company will make a decision once “we know exactly how much square footage we need.”

He said the sale of the headquarters building was part of a larger shift to reduce the company’s real estate ownership. SAIC sold a Vienna complex in 2011 and buildings in Dayton, Ohio, and Washington state in 2012.

Under the deal announced last week, SAIC has agreed to sell three of its buildings for $85 million, according to a filing with the Securities and Exchange Commission. The purchase price for the rest of the property will be based on the land’s rezoning, but the company estimated the price will be between $120 million and $140 million.

The buy makes Meridian one of the largest landowners in Tysons Corner as the area prepares for Metro’s Silver Line to begin running at the end of the year.

David Cheek, one of Meridian’s principals, said the company plans to initially spend $20 million upgrading two existing buildings and preparing them for new tenants. Meridian plans to add retail and other amenities as well.

“We think that will be a competitive advantage on a lot of buildings at Tysons,” he said.

Also last week, SAIC announced one of the new leaders of Leidos. Lou Von Thaer, previously president of General Dynamics’s advanced information systems unit, is set to take over Leidos’s national security sector. The role was previously held by Tony Moraco, who was tapped to head SAIC.

Von Thaer, who starts in early June, said in an interview last week that the Leidos role combines a “standing, well-performing legacy company ... and the excitement of setting up something new.”

While he acknowledged Leidos will have to build a new reputation, Von Thaer said he expects a smooth transition.

“I think the customers are more attached to the people than they are to the brand of the company,” he said.

Von Thaer will oversee 13,000 employees in his new role. He has been president at the General Dynamics unit since 2005 and his previous experience also includes Lucent Technologies and its predecessor AT&T Bell Laboratories.

Staff writer Jonathan O’Connell contributed to this report.

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