Dive Brief:
- Technology and consulting company Leidos intends to spin off its security screening technology business unit to create a joint venture by combining with technology company Analogic, owned by healthcare investment firm Altaris.
- Leidos will contribute roughly 1,500 employees, representing $625 million in projected 2026 revenue, toward the joint venture. The new venture will operate under the Analogic brand. That company would own 58.5% of the JV, while Fortune 500 company Leidos would hold a 41.5% minority stake, according to a securities filing.
- The upcoming private entity would merge the two companies’ detection technologies, manufacturing capabilities and engineering expertise to strengthen security screening at airports, borders and other critical infrastructure. The transaction is anticipated to close in the second half of 2026.
Dive Insight:
While the JV will be based in the United States, it will have operations worldwide, according to a press release.
Additionally, the joint venture would push for a swifter transition to artificial intelligence-native and 3D imaging products, enabling more streamlined and effective outcomes. It would also expand Analogic’s product portfolio and sales channels, allowing it to support customers worldwide across security screening technologies’ full life cycle, CEO Tom Ripp said in a statement.
“Customers will benefit from simplified engagement, deeper domain expertise, and solutions that are better aligned with their operational and regulatory requirements,” Ripp said. “Together, we are better positioned to innovate and support airport, port and border security customers as they address increasing security demands while maintaining passenger throughput and operational efficiency.”
Analogic was formed in 1967 and sells advanced imaging, power and automation and motion control technologies that serve the aviation security, medical and industrial end markets.
The company has 900 employees with facilities located worldwide. Analogic is headquartered in Salem, New Hampshire, and houses R&D and manufacturing capabilities for medical imaging, security and detection systems, according to its website. Analogic also has an R&D site in Canton, Massachusetts, focused on power technologies such as MRI machines; an X-ray detector R&D and manufacturing building in Montreal; and a medical imaging and power technologies R&D and manufacturing facility in Shanghai.
“Combining SES with Analogic will position the new company to promote investment in innovation, deliver more efficient solutions for the U.S. government and ensure that the world’s advanced security technology is designed and engineered from the United States,” Leidos CEO Tom Bell said in a statement.
As of Jan. 2, Leidos' security division owned facilities in Huntsville, Alabama; Columbia, Maryland; Orlando, Florida; Oak Ridge, Tennessee; and Decatur, Alabama, according to a securities filing. In 2023, Leidos announced it would invest $31.7 million in establishing a security systems manufacturing facility in Ladson, South Carolina, its third such location in the U.S. The site also serves as a Manufacturing Center of Excellence for Leidos’ security enterprise solutions.
The upcoming JV aligns with Leidos’ growth strategy, dubbed NorthStar 2030, which the government contractor and private business services company introduced in February 2025.
The corporate plan also aligns with the Trump administration’s priorities, Bell said during an earnings call in May 2025. He cited executive orders, such as the one establishing the Department of Government Efficiency that President Donald Trump signed in January 2025, aimed at upgrading federal technology and software to “maximize governmental efficiency and productivity.”
During an earnings call in February, Bell announced that Leidos had realigned the company to “best execute” its growth strategy, including changes to its four reporting segments: intelligence and digital, health, homeland and defense. These were modified to focus on “specific, defined capability sets delivered to customers,” according to a securities filing.
The homeland segment, which the security enterprises division currently is under, “brings together” Leidos’ businesses that play a role in the Trump administration’s priorities, Bell said.
“It combines our commercial and international business with our homeland security work and air traffic management portfolio previously in national security and health and civil, respectively,” the CEO said during the call.
Leidos is one of the government contractors waiting for Congress to pass legislation to fund the Department of Homeland Security, which includes Immigration and Customs Enforcement and Customs and Border Protection.
DHS has been shut down since February as attempts to pass appropriations for the agency have fail. Chris Cage, Leidos’ executive VP and CFO, said at the JPMorgan Industrials Conference in March that “it’s disappointing” that DHS still has not received funding. However, impacts to the company were “very modest” regarding its Q1 earnings.
In the meantime, Leidos is working with the Transportation Security Administration on piloting upgraded equipment and software, he said. Working with newly appointed DHS Secretary Markwayne Mullin would also help push for potential funding to buy new equipment from Leidos.
“Those are the kinds of things that we need to get through, get the DHS back to business completely,” Cage said.
