Leidos’ $2.4 Billion Power Play: Why the ENTRUST Deal Could Supercharge Its Energy Future ( $LDOS $SPY )

Leidos (LDOS) is betting that the future of power isn’t just about electrons—it’s about engineering, data and a lot of capital expenditure, and it’s writing a $2.4 billion all‑cash check for ENTRUST Solutions Group to prove it. The deal doesn’t just bulk up Leidos’ utility business; it almost doubles its energy‑infrastructure footprint and nudges the company deeper into the trillion‑dollar grid modernization wave now rolling across U.S. utilities.

A $2.4 Billion Spark in the Grid

Leidos has agreed to acquire ENTRUST Solutions Group from private‑equity owner Kohlberg for roughly $2.4 billion in cash, its largest purchase since it bought Lockheed Martin’s IT services business in 2016. ENTRUST is expected to bring in about $650 million of annual revenue at attractive margins, implying a purchase multiple of roughly 16 times next‑twelve‑month EBITDA after factoring in tax benefits.

The transaction, expected to close by the end of the second quarter of 2026, will be financed with a mix of new debt, existing cash and commercial paper, leaving Leidos within its targeted leverage range. Management says the deal should support revenue growth and margin expansion immediately and turn accretive to adjusted earnings per share by 2027—Wall Street’s equivalent of promising dessert after the vegetables.

Doubling Down on Energy Engineering

ENTRUST designs and engineers infrastructure for gas and electric utilities, from power delivery and transmission lines to natural‑gas systems—precisely the kind of “behind‑the‑scenes” work that keeps the lights on and regulators calm. Folded into Leidos, the acquisition is expected to essentially double the company’s energy‑infrastructure engineering business to about $1.3 billion of annual revenue and add more than 3,000 employees, taking the energy workforce to roughly 5,500.

Executives say the combined operation will create an integrated platform spanning power generation, transmission and distribution, as well as gas‑infrastructure design—without straying into riskier construction work. In consultant‑speak, this makes Leidos one of the top players in U.S. transmission and distribution engineering; in investor‑speak, it makes the company more relevant every time a utility board decides its aging grid suddenly looks very 1970s.

Riding the Trillion‑Dollar Grid Wave

The timing isn’t accidental: U.S. utilities are projected to invest around $1 trillion over the next decade to modernize aging networks, handle surging load from data centers and electrification, and harden systems against cyber and physical threats. Leidos executives point to an ongoing pivot in utility spending priorities as load growth accelerates and regulators push for more resilient, digital‑ready grids.

That backdrop dovetails neatly with Leidos’ “North Star 2030” strategy, which emphasizes growth in sectors where customer demand is rising and the company can layer specialized technology on top of engineering services. ENTRUST’s deep utility relationships give Leidos more seats at the table just as those multi‑year capital plans are being drawn up—a useful place to sit when a trillion dollars is looking for engineering invoices.

Cyber, Data and the Leidos Playbook

Leidos isn’t just chasing poles and wires; it is also chasing the data and cybersecurity wrapped around them. Management highlights cross‑selling opportunities, from injecting Leidos’ cybersecurity and IT offerings into ENTRUST’s utility client base to applying data analytics and automation to grid design and asset management. With cyber threats to critical infrastructure rising, the ability to pair engineering blueprints with security architectures could become a differentiator—and a handy talking point on earnings calls.

The company also emphasizes cultural fit and prior M&A experience, noting that the same leadership group that successfully integrated the Kudu acquisition will oversee ENTRUST’s integration. Synergy plans lean more toward technology and scale efficiencies than sweeping job cuts, which should reassure both employees and regulators that the only thing being “de‑energized” here is redundant software.

What It Signals for Investors

For Leidos shareholders, the ENTRUST deal underscores the company’s evolution from a defense‑and‑IT stalwart into a broader engineering and infrastructure player tethered to long‑cycle utility capex. The transaction increases exposure to regulated utility spending, which tends to be steadier than some federal budget lines, while maintaining optionality to layer in higher‑margin technology, cyber and AI‑driven services over time.

Of course, integration risk, regulatory timing and higher leverage are the usual footnotes, and investors will be watching closely to see if promised “tens of millions” in synergies arrive on schedule. But if Leidos executes to plan, this $2.4 billion wager could turn its once “hidden gem” energy unit into a flagship business—proving that in today’s market, the real power move isn’t flipping the switch, it’s owning the grid‑design schematics.

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The Sources

1. Yahoo Finance – “Leidos to Buy ENTRUST for $2.4B Cash Deal, Aiming to ‘Turbocharge’ Energy Growth by 2026” https://finance.yahoo.com/news/leidos-buy-entrust-2-4b-093803488.html[1]
2. Yahoo Finance – “Leidos Expands Energy Infrastructure Presence With $2.4B ENTRUST Deal” https://finance.yahoo.com/news/leidos-expands-energy-infrastructure-presence-151900809.html[6]
3. Leidos – “Leidos to acquire power design firm ENTRUST, bolstering its energy infrastructure portfolio” https://www.leidos.com/insights/leidos-acquire-power-design-firm-entrust-bolstering-its-energy-infrastructure-portfolio[11]
4. ENR – “Leidos Inks $2.4B Deal to Buy Power Design Firm ENTRUST Solutions” https://www.enr.com/articles/62428-leidos-inks-24b-deal-to-buy-power-design-firm-entrust-solutions[9]
5. The Wall Street Journal – “Leidos to Buy Kohlberg’s Entrust for $2.4 Billion” https://www.wsj.com/finance/investing/leidos-to-buy-kohlbergs-entrust-for-2-4-billion-c7deafef[10]
6. Reuters – “Leidos to acquire ENTRUST for $2.4 billion to enhance its energy infrastructure business” https://www.reuters.com/legal/transactional/leidos-buy-power-design-firm-entrust-about-24-billion-2026-01-26/[8]
7. Yahoo Finance – “Leidos signs agreement to acquire ENTRUST Solutions in $2.4bn deal” https://finance.yahoo.com/news/leidos-signs-agreement-acquire-entrust-112601795.html[2]
8. Washington Technology – “Leidos makes $2.4B bet on utility infrastructure with Entrust acquisition” https://www.washingtontechnology.com/companies/2026/01/leidos-makes-24b-bet-utility-infrastructure-entrust-deal/410926/[3]
9. WashingtonExec – “Leidos to Acquire ENTRUST Solutions Group for $2.4B” https://washingtonexec.com/2026/01/leidos-to-acquire-entrust-solutions-group-for-2-4b/[4]
10. GovConWire – “Leidos Strikes $2.4B Deal for Power Design Firm ENTRUST” https://www.govconwire.com/articles/leidos-2-4b-entrust-acquisition[5]
11. Kohlberg – “Kohlberg Announces Sale of ENTRUST Solutions Group to Leidos for $2.4 Billion” https://www.kohlberg.com/kohlberg-announces-sale-of-entrust-solutions-group-to-leidos-for-2-4-billion/[7]