Leidos bets on offensive cyber with $300M Kudu acquisition
Tom Bell, CEO of Leidos, speaking at company town hall earlier this month. Leidos
By
Nick Wakeman
The purchase seeks to fulfill growing demand for converged cyber-electronic warfare solutions.
Leidos has completed its $300 million acquisition of Kudu Dynamics, a move that brings offensive cyber capabilities to the buyer.
The transaction is Leidos’ first since 2022, when it acquired Cobham’s aviation services business in Australia for $215 million.
For Leidos, it sees the Kudu acquisition as helping to better compete rapidly evolving cyber warfare market with the addition of artificial intelligence-powered capabilities.
Chantilly, Virginia-headquartered Kudu started out in 2013 and has since carved out a niche in automated targeting, scalable hardware reverse engineering. Kudu also specializes in what the industry terms "non-kinetic effects" – cyber operations that achieve military objectives without traditional weapons.
The acquisition "accelerates Leidos' strategy for AI-enabled offensive cyber, electromagnetic spectrum operations and vulnerability research," Leidos said in a release Wednesday.
“Kudu’s ability to generate new cyber capabilities with AI perfectly complements our strategy to rapidly grow differentiated offensive cyber technology capabilities,” said Leidos Chief Executive Officer Tom Bell.
Bell talked about the Kudu acquisition without revealing its name during the company’s May 7 earnings call with investors.
“Their expertise in vulnerability research, reverse engineering, exploit development and the converging cyber electronic warfare markets are squarely in line with our cyber strategy,” Bell said at the time.
Cyber is one of Leidos’ five growth pillars along with space and maritime, energy infrastructure, highly customized mission software, and managed services.
Investment bank Baird worked as financial adviser to Kudu and said the move “underscores several themes in the defense and government market.”
These include strong interest from buyers in providers of decisive mission capabilities as well as customer demand for next generation converged cyber/electronic warfare solutions.
Baird said the transaction also tracks with the alignment of national security funding priorities with increasing threats in the Indo-Pacific region.
Leidos sees the Defense Department as moving toward integrated solutions that combine cyber operations with electronic warfare and AI-driven automation, which are capabilities Leidos sees in Kudu.
Kudu is now part of Leidos’ national security segment. Kudu's founder and CEO Mike Frantzen will remain with the company.
“In Leidos, we’ve found a partner who shares our ethic of purposeful innovation in support of our nation’s most critical missions,” Frantzen said in the Leidos announcement.