Lockheed Martin sells Valley Forge-based Enterprise Integration Group

Lockheed Martin Corp. announced Wednesday the sale of its Valley Forge-based Enterprise Integration Group (EIG) for $815 million to a New York private-equity fund that specializes in defense-industry contractors.

Lockheed Martin, the Bethesda, Md., contractor and maker of heavy armaments including the joint strike fighter and F-22 Raptor, said in June that it intended to sell EIG to improve performance and avoid potential problems over new conflict-of-interest regulations for military contractors.

EIG provides, among other things, sophisticated computer programing for the nation's intelligence agencies.

It has 1,800 employees, 700 of whom are in the Philadelphia region. According to Veritas, it had $625 million in revenue last year.

"The decision to divest EIG followed a comprehensive review of our portfolio to find ways to continuously provide the best, most affordable solutions for our customers, a secure future for our employees, and value for our shareholders," said Lockheed Martin chairman and chief executive officer Robert J. Stevens in a statement. "EIG and its employees continuously demonstrate tremendous capability and serve the nation with dedication, diligence, and honor. I am confident that the company and its employees will continue to thrive under the management of Veritas."

Said Robert B. McKeon, founder and managing partner of Veritas Capital: "Lockheed Martin's decision to divest EIG provided us with a unique and exciting opportunity to partner with a truly outstanding business and world-class management team. EIG's technical capabilities have distinguished it as the unparalleled leader in full life-cycle systems engineering and integration support to the U.S. intelligence community."

Lockheed Martin decided to sell EIG in response to a new law passed by Congress last year that requires the Defense Department to tighten rules on potential organizational conflicts of interests.

The 2009 Weapons System Acquisition Reform Act included a provision to prevent companies from selling a product as well as the systems needed to evaluate the product's performance.

"Because our company provides both systems and services to the range of customers served by EIG, Lockheed Martin is increasingly viewed as a potentially 'conflicted' company by these customers," Stevens said in a letter to Lockheed Martin employees in June. "Despite our 40-year history of successfully mitigating OCI, we plan to divest EIG to free it from these perceptions and clear its path to growth and greater value."