Falls Church-based General Dynamics said Tuesday it will pay close to $1 billion to acquire Arlington-based Vangent, a federal contractor that specializes in health care services.
The deal comes as defense contractors, anticipating reduced Pentagon spending, particularly on large equipment, look to diversify. Many are seeking to expand their information technology practices in areas expected to grow, including health care and cloud computing.
Vangent, which is majority-owned by private equity firm Veritas Capital, is to become part of General Dynamics Information Technology, which already has a portfolio of health IT work. General Dynamics said its board already has approved the $960 million transaction, and it is expected to close by Oct. 1.
Vangent has done a range of federal work, including processing many of the vouchers used in the federal “Cash for Clunkers” car-buying incentive program, but in recent years has focused on bolstering its health IT offerings. The company established a health strategy group meant to help it capture federal work, and last year paid $65 million for Warrenton-based Buccaneer Computer Systems and Service, which has done work for the Food and Drug Administration and the Centers for Medicare and Medicaid Services, among others.
General Dynamics spokesman Rob Doolittle said the company has no plans to change Vangent’s locations or staffing levels.