Booz Allen Splits Its Businesses
Friday, August 1, 2008
Booz Allen Hamilton said yesterday that it had completed the separation of its government and commercial businesses, selling a majority stake in the government unit to District private-equity giant Carlyle Group for $2.54 billion.
The split-up, announced in May, has its roots in the vast differences that have surfaced this decade between the two units at the consulting firm. The McLean-based government unit, which does billions of dollars of work each year for agencies including the Pentagon and National Security Agency, has enjoyed rapid growth because of post-Sept. 11 spending. The commercial unit, now known as Booz & Co, grew but not at the same pace.
Carlyle, which usually buys companies, shakes them up and then tries to sell them for a higher price, has said it plans to leave Booz Allen largely alone. But it may also help the firm acquire companies deemed necessary for faster growth.
"Looking ahead, we are excited about Carlyle's investment and the ability to leverage their experience in our growing U.S. government consulting business," said Ralph W. Shrader, chairman and chief executive of Booz Allen, who has forgone retirement to stay with the government business.
Booz & Co. chief executive Shumeet Banerji, who is based in London, said in a statement, "This is an exciting time for us, as an independent company and also as a leader in global management consulting."
Shrader and Banerji both said they hope their firms will continue to work together when possible.