Leidos’ $2.4 Billion Purchase of ENTRUST: A Detailed Rewrite of the Deal and Why It Matters

Leidos Holdings announced it will acquire ENTRUST Solutions Group from private equity owner Kohlberg for about $2.4 billion. The goal is simple but huge: expand Leidos’ utility engineering capabilities at a time when North America’s power grid is being pushed harder than ever by electrification, data center growth, and the need to modernize aging infrastructure for reliability and extreme weather resilience.

This article rewrites and expands the key points behind the announcement—what’s being bought, how it’s being financed, why the timing matters, and what it could mean for utilities, customers, and the wider energy infrastructure market.

1) What Was Announced (And the Core Deal Terms)

On January 26, 2026, Leidos said it has agreed to buy ENTRUST Solutions Group in a transaction valued at roughly $2.4 billion. ENTRUST is described as a “power design” and engineering-focused firm that serves energy and infrastructure customers—especially utilities. The seller is Kohlberg, a private equity firm.

Leidos expects the transaction to close by the end of the second quarter of 2026, assuming typical regulatory clearances and closing conditions are met.

In advisory roles, Leidos said Citi is acting as its financial advisor and Davis Polk & Wardwell LLP is acting as its legal advisor for the deal.

2) Who Is ENTRUST Solutions Group?

ENTRUST Solutions Group is an engineering, consulting, and services platform focused on critical infrastructure—especially the energy ecosystem. The company emphasizes broad utility coverage, licensed engineering talent, and work across many geographies and technical specialties. ENTRUST says it has 3,100+ employees and operates from roughly 36 locations, serving customers across all 50 U.S. states and Canada.

Public descriptions of ENTRUST’s work highlight support for electric utilities, gas utilities, and related infrastructure operators, including engineering, consulting, and automation-style capabilities.

That matters because utilities don’t just need “more power.” They need design, engineering, planning, program management, permitting support, protection and controls, and communications to keep power reliable as load grows and the grid becomes more complex.

3) Why Leidos Wants ENTRUST: The Strategy in Plain English

Leidos already has a meaningful energy and utility engineering business. In the Reuters report, Leidos pointed to fast-changing demand drivers: grid expansion tied to electrification and data center demand, plus continued investment to make aging infrastructure more resilient against extreme weather events.

Leidos framed the acquisition as a way to expand engineering offerings for utility customers. It also expects the deal to double the size of its roughly $600 million energy infrastructure engineering business, and to broaden its client base to include gas utilities as well.

Think of it like adding a second strong engine to a truck that’s already hauling heavy loads. Leidos wants more scale, more engineers, and more “bench depth” so it can deliver more projects at once—especially in transmission and distribution-heavy work where utilities are spending aggressively.

3.1 The Market Tailwinds: Electrification + Data Centers + Grid Modernization

Utilities are being asked to do three hard things simultaneously:

• Expand capacity for new load (including large data centers).
• Modernize old infrastructure so it fails less often and recovers faster.
• Upgrade planning and operations as the grid becomes more digital and interconnected.

Reuters specifically linked Leidos’ growth to “aggressive grid expansion” driven by electrification and data center demand, plus modernization spending for reliability and resilience.

Industry coverage has also pointed to years of rising utility investment and reliability pressure, with data centers and AI-related computing needs becoming a major driver of power and infrastructure work.

4) What Changes for Leidos After the Acquisition?

Leidos and ENTRUST together would create a bigger combined footprint in the energy market. One key metric mentioned in the Reuters report: the combined organizations would have over 5,500 professionals working in the energy market, according to ENTRUST’s CEO.

Scale matters in utility engineering because projects can be massive, multi-year, and spread across many regions. Having thousands of specialists allows a firm to:

• Run multiple programs at once for different utilities
• Cover specialized engineering disciplines more consistently
• Respond faster when utilities need urgent rebuilds after storms
• Invest in tools, training, and standardized delivery methods

4.1 A Bigger “Energy Infrastructure Portfolio”

Leidos publicly described the acquisition as strengthening its energy infrastructure position and accelerating its role as a leading engineering solutions provider for utilities.

On its own site, Leidos highlights capabilities like transmission and distribution design and engineering, substation, SCADA and communications, and broader grid planning and program support—exactly the kinds of services utilities rely on when upgrading networks.

Put simply: Leidos is aiming to be the kind of partner utilities can call for large portions of their “grid work pipeline,” not just one-off tasks.

5) Financial Expectations: Revenue Growth, Margins, and EPS

Leidos said it expects the acquisition to be immediately additive to revenue growth and to its adjusted core profit margin. It also expects the deal to contribute to adjusted earnings per share in 2027.

Those phrases are important in deal language:

• “Immediately add to revenue growth” usually means the acquired company brings a strong existing backlog and customer demand.
• “Add to margins” implies either ENTRUST’s profitability is attractive, or Leidos believes it can operate the combined platform more efficiently.
• “EPS accretive in 2027” suggests Leidos expects integration and financing costs, then improved earnings power once the deal settles.

Leidos CEO Tom Bell said ENTRUST’s engineering capabilities and customer base “perfectly complement” Leidos’ existing platform—language that signals Leidos sees strong operational fit rather than a pure financial play.

6) How Leidos Plans to Pay for It

Leidos stated it will fund the transaction using a mix of new debt, cash on hand, and commercial paper.

That financing approach is common for large strategic acquisitions. It gives Leidos flexibility to manage cost of capital, preserve liquidity, and avoid relying on a single funding source. The trade-off is that higher debt can increase interest expense, which is why management often emphasizes when they expect a deal to become EPS-accretive.

7) Why Private Equity Is Selling (And What Kohlberg Said)

Kohlberg’s statement on the transaction described it as a successful exit after a recapitalization in 2023, framing the sale as the outcome of a value-building period under its ownership.

Kohlberg describes itself as a middle-market private equity firm based in Mount Kisco, New York, with a focus on investing in healthcare and services businesses.

For private equity, an exit like this typically happens when:

• Operational improvements have been made (scale, processes, acquisitions)
• Market demand is strong (buyers pay more when industry tailwinds are strong)
• A strategic buyer can pay for “synergies” that financial owners can’t easily monetize

Given the heavy spending cycle in grid modernization and the engineering talent shortage in many regions, a strategic buyer may value ENTRUST’s workforce and customer relationships highly.

What This Could Mean for Utilities and the Grid

This deal isn’t only about corporate growth. If the integration goes well, utilities may see benefits such as:

Faster project delivery

Utilities often face large backlogs—interconnection work, substation upgrades, line reconductoring, storm hardening, and new builds. A larger combined engineering team can help execute more projects simultaneously.

More end-to-end coverage

With broader capabilities, a combined platform can support planning, design, program management, communications, and controls work in a more connected way. Leidos already markets broad power delivery services, and ENTRUST brings additional depth across utilities and infrastructure.

Potentially stronger resilience focus

Reuters noted modernization investments to strengthen aging infrastructure against extreme weather. More scale can make it easier to surge resources during urgent rebuilds.

Risks and Watch-Outs (Because Every Big Deal Has Them)

Even when a deal looks strategically clean, the outcome depends on execution. Key risks to watch include:

• Integration risk: aligning processes, tools, and delivery methods without slowing projects.
• Talent retention: engineering is people-driven; keeping leaders and high performers is critical.
• Customer continuity: utilities need reliability in partners—any disruption can create churn.
• Debt and rates: financing with debt can pressure earnings if rates or costs move unexpectedly.
• Project cycle volatility: utility spending is strong now, but priorities can shift with regulation, storms, or economic conditions.

Leidos’ message that the deal will add to growth and margins immediately suggests it believes ENTRUST has strong fundamentals and that customer demand is durable.

FAQs

1) How much is Leidos paying for ENTRUST?

Leidos said the acquisition is valued at about $2.4 billion.

2) Who is selling ENTRUST to Leidos?

ENTRUST is being sold by private equity firm Kohlberg.

3) When is the deal expected to close?

Leidos said it expects the transaction to close by the end of Q2 2026.

4) How will Leidos finance the acquisition?

Leidos plans to fund it using a combination of new debt, cash on hand, and commercial paper.

5) What is the main business reason for this acquisition?

Leidos wants to expand and scale its utility engineering offerings during a period of heavy grid investment driven by electrification, data center demand, and modernization needs.

6) How big will the combined energy workforce be?

Reuters reported that, combined, the companies would have over 5,500 professionals working in the energy market.

Conclusion

Leidos’ plan to acquire ENTRUST for about $2.4 billion is a major bet on the long-term reality that the grid needs a huge rebuild and expansion cycle. With electrification rising, data centers demanding more power, and infrastructure facing extreme weather stress, utilities need engineering partners that can scale. Leidos is positioning itself to be one of those large, go-to providers—while ENTRUST gains access to the resources and platform of a much larger public company.

If the integration stays smooth, the combined company could accelerate project delivery capacity across the energy market, broaden utility customer coverage (including gas utilities), and strengthen Leidos’ role in North America’s critical infrastructure transformation.

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