WASHINGTON — A federal judge in Maryland denied a U.S. Department of Justice request to block Booz Allen Hamilton’s purchase of fellow defense firm EverWatch, which the government is challenging on antitrust grounds.
U.S. District Judge Catherine Blake’s Oct. 11 decision means the proposed merger can proceed while the case against it is argued.
The Justice Department in June sued to prevent Booz Allen from acquiring EverWatch, a transaction it valued at $440 million. In its complaint, the government alleged the merger would imperil market competition and hamstring services provided to the National Security Agency under a signals intelligence and simulation contract known as Optimal Decision.
“The United States of America’s motion for a preliminary injunction is denied,” Blake said in her order. “Counsel should confer and submit proposals for further proceedings in this case no later than 14 days after the deadline for submitting Optimal Decision bids. The United States of America will advise the court of any changes to the Optimal Decision bidding and award schedule.”
Blake’s full opinion was sealed as of Oct. 13, as were other documents associated with the case.
Jessica Klenk, a spokesperson for Booz Allen, on Thursday told C4ISRNET the company appreciated “Judge Blake’s careful consideration of the evidence in this matter.”
Booz Allen and EverWatch, owned by investment firm Enlightenment Capital, are thought to be the only two serious bidders on Optimal Decision. The NSA unexpectedly issued a request for proposals for the contract in mid-September, as the antitrust case played out. The deal, according to court filings, is worth less than $17 million in profit over five years.
Booz Allen has told the court its purchase of EverWatch would stimulate competition and allow it to take on larger, entrenched competitors such as Lockheed Martin and Raytheon Technologies. In court filings, the company said it identified more than a dozen opportunities to unseat others and win lucrative contracts totaling billions of dollars.
Booz Allen employs some 30,000 people and is the 22nd largest defense contractor by revenue, according to the latest Defense News rankings. Lockheed and Raytheon are Nos. 1 and 2, respectively.
The Booz Allen-EverWatch merger was first announced in March.
Colin Demarest is a reporter at C4ISRNET, where he covers military networks, cyber and IT. Colin previously covered the Department of Energy and its National Nuclear Security Administration — namely Cold War cleanup and nuclear weapons development — for a daily newspaper in South Carolina. Colin is also an award-winning photographer.