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Tag: McLean

Capital One, Walmart end credit card agreement

McLean-based Capital One Financial is no longer the exclusive issuer of Walmart consumer credit cards.

The two Fortune Global 500 companies announced Friday that they had ended their consumer card agreement. The announcement follows problems first uncovered in late 2022 and early 2023, according to Reuters reporting.

Capital One became the exclusive issuer of Walmart’s private label and co-branded credit card program in the U.S. on Aug. 1, 2019, after the bank and retail giant announced the partnership in 2018. Their agreement followed the end of Arkansas-based Walmart’s nearly 20-year partnership with Synchrony Financial.

In April 2023, Walmart filed a lawsuit in the U.S. District Court for the Southern District of New York to end the partnership. The retailer said the bank failed to deliver customer replacement cards within five days and to promptly update transaction and payment information in customer accounts. A federal judge ruled in March that Walmart could end the credit card partnership with Capital One.

Cardholders, though, can continue to earn and redeem rewards, and until informed otherwise, can continue to use their Capital One Walmart Rewards cards wherever Mastercard is accepted, according to a news release.

Capital One retains ownership and servicing of the credit card portfolio, which, according to a Securities and Exchange Commission filing, totals approximately $8.5 billion in loans. The company expects to convert eligible customers into Capital One-branded cards.

The end of the agreement also terminates the companies’ revenue-sharing and loss-sharing agreements.

Capital One is in the process of buying Discover Financial Services in a $35.3 billion all-stock deal, but the deal has come under federal scrutiny.

As of March 31, Capital One and its subsidiaries had $351 billion in deposits and $481.7 billion in total assets. Capital One ranked No. 106 on Fortune magazine’s 2023 Fortune 1000 list and No. 386 on its 2023 Global 500 list.

Peraton exec takes top spot at V2X

Jeremy Wensinger will replace Chuck Prow as president and CEO of McLean-based aerospace and defense contractor V2X on June 17, the company announced Monday.

The transition is part of a “board-led succession planning process” the company said in a news release.

Wensinger, who will also be a member of V2X”s board of directors, has more than three decades of experience as a defense and government contracting executive. He comes to V2X from Reston-based technology contractor Peraton, where he served as chief operating officer since 2017.

Previously, Wensinger was principal at Augusta Management Strategies, a consulting firm for the defense sector, as well as president at Falls Church-based government contractor PAE, which was acquired by Germantown, Maryland-based aerospace defense contractor Amentum Services in 2022.

“He has a proven track record of delivering best-in-class financial and operational performance within the broad defense services and aerospace industry, as well as a strategic approach to managing businesses, building strong stakeholder relationships and creating value,” Mary Howell, V2X’s board chairman, said in the statement.

V2X formed in 2022 from the $2.1 billion merger of Colorado-based government contractor Vectrus and Mississippi-based The Vertex Co. In June 2023, the company, which has about 16,000 employees, landed at No. 907 on the Fortune 1000 list.

V2X reported a 2023 revenue of $3.96 billion, up 8% over 2022. The company serves national security, defense, civilian and international clients with solutions related to operations and logistics, aerospace, training and technology.

Prow, who was named president and CEO of Vectrus in 2016, has more than 30 years of experience in information technology and federal services. He previously worked as a general manager of global government industry and in other roles at IBM. He also worked at Ernst & Young and PricewaterhouseCoopers.

“As the company nears the two-year anniversary of completing the transformational merger of Vectrus with Vertex to create the V2X platform, we thank Chuck for his dedication and valuable contributions,” Howell said in a statement. “During his tenure as CEO, the company delivered significant organic growth as well as further diversified its contract and customer base, established entirely new technological and service capabilities and delivered an enhanced customer and employee experience.”

Intelsat to be acquired by SES for $3.1B

McLean-based satellite services provider Intelsat announced Tuesday that it has made a deal to be acquired by SES, a Luxembourg-based competitor, for $3.1 billion in cash. 

The deal is expected to close during the second half of 2025, depending on regulatory clearances and other factors, according to a news release. 

Intelsat CEO David Wajsgras will stay on at Intelsat until the close of the transaction “He does not plan to remain with the combined company,” Clay McConnell, a spokesperson for Intelsat, said in an email. 

The combined SES will be headquartered in Luxembourg, but will have a “significant presence” in the U.S., according to the release. In March, SES held a ribbon-cutting ceremony for their new U.S. technology and operations hub facility in Prince William County. 

Intelsat and SES previously discussed a merger, but talks fell apart in June 2023.

Once the companies combine, SES will offer a fleet of more than 100 Geostationary Earth Orbit (GEO) and 26 Medium Earth Orbit (MEO) satellites. Previously, SES had boasted a global fleet of more than 70 GEO and MEO satellites. 

The additional satellites will allow SES to provide enhanced coverage, greater network resiliency and improved service delivery, according to the release. 

Wajsgras joined Intelsat as CEO in April 2022 soon after the satellite operator’s emergence from Chapter 11 bankruptcy and financial restructuring.

In March, Intelsat announced it had committed to secure low-Earth orbit service for six years for $250 million from Paris-based Eutelsat Group’s OneWeb low-Earth orbit (LEO) constellation service, with an option for another $250 million.

“Over the past two years, the Intelsat team has executed a remarkable strategic reset,” Wajsgras said in a statement. “We have reversed a 10-year negative trend to return to growth, established a new and game-changing technology roadmap and focused on productivity and execution to deliver competitive capabilities.”

 

Guidehouse lands $12B ICBM support contract

McLean-based consultancy Guidehouse has won a contract valued up to $12 billion for systems engineering supporting the Air Force’s intercontinental ballistic missiles fleet, although the initial contract awardee has filed a protest.

The single-award contract, announced Feb. 28 by the Defense Department and April 15 by Guidehouse, is the Integration Support Contract 2.0. Guidehouse was one of five companies competing for the contract, according to the Pentagon. The original contract holder, a subsidiary of Falls Church-based BAE Systems Inc., has filed a protest.

Under the 18-year contract, Guidehouse will support the current generation of land-based ICBMs — the Minuteman III — and its replacement, the Sentinel. The transition of 400 combat-capable nuclear missiles and support infrastructure will take nearly a decade, according to a news release.

“The new Sentinel must be acquired in a manner that allows the Air Force to own the technical baseline with full transparency and data rights, as well as control costs and schedule in a single-source environment,” Charles Beard, Guidehouse’s chief operating officer, said in a statement.

The contractor will provide a range of systems engineering and integration services and professional services, including administration, business analysis, cybersecurity, digital engineering, finance, mission effectiveness, program management, risk management and other services.

“These deterrent assets are at the vanguard of our nation’s defense, as well as that of NATO and other allies around the world,” Guidehouse CEO Scott McIntyre said in a statement. “We are proud of the Air Force’s selection of Guidehouse to be its partner in such a vital mission.”

Work will be performed at Hill Air Force Base, Utah, and other locations and is expected to be completed by Aug. 27, 2042. Guidehouse expects to begin its staffing on the contract with nearly 1,000 full-time employees on-site at the Air Force base and at the company’s new office in Clearfield, Utah, according to a news release.

Rockville, Maryland-based BAE Systems Technology Solutions & Services, a subsidiary of Falls Church–based BAE Systems Inc., won the original Integration Support Contract in 2013 and then won the recompete (ISC 2.0) in 2022. But, Guidehouse and Tennessee-based Jacobs Technology protested the award, and the Government Accountability Office recommended that the Air Force reevaluate proposals and “perform a new best-value tradeoff.” In March, BAE Systems filed a protest with the GAO of the award to Guidehouse.

Guidehouse employs more than 16,000 people across 55 locations around the globe. In 2022, the company opened its new McLean headquarters, moving from a previous location near the White House in Washington, D.C. In December 2023, Bain Capital Private Equity closed its acquisition of Guidehouse.

McLean’s Iridium closes on Satelles deal

McLean-based Iridium Communications, a global satellite communications company, has completed its previously announced acquisition of Satelles, a Reston-based provider of satellite-based time and location services that assist GPS and global navigation satellite systems (GNSS), the company announced Tuesday.

Iridium first announced the acquisition in March. The positioning, navigation and timing service previously known as STL from Satelles will now be called Iridium Satellite Time and Location. According to Iridium, the service protects GPS and other GNSS-reliant systems’ time-synchronized applications from spoofing, when hackers trick a GPS receiver into calculating a false position, and jamming, when hackers interfere with GPS satellite signals, making them ineffective.

Using small hardware that doesn’t require outdoor antennas, Iridium STL can help protect critical infrastructure, data centers, 5G base stations and applications across the aviation, maritime, land mobile and Internet of Things sectors. The service works indoors and continues to work during regional GNSS system outages, according to a news release.

Previously, Iridium disclosed that the company had an ownership stake of 20% in Satelles through three earlier investments, and that it would pay about $115 million for the other 80%. This purchase was Iridium’s first acquisition.

“We’re ready to step on the gas and expand the availability of Iridium STL to markets around the world,” Matt Desch, the company’s CEO, said in a statement. “With our experienced partner ecosystem and global footprint, this needed capability can quickly help make the critical services we all rely on every day more efficient, reliable and secure.”

Iridium, which assumed all rights to the Satelles patent portfolio, expects STL to generate over $100 million in service revenue annually by 2030 and additional revenue from equipment and engineering, according to the company.

In 2023, Iridium reported a total revenue of $790.7 million, up 10% from 2022, and net income of $15.4 million, an improvement from $8.7 million in 2022.

231-unit affordable housing development coming to McLean

Construction will begin immediately on the 231-unit first phase of an affordable housing development in McLean backed by Amazon.com, SCG Development announced Wednesday.

Located at 1750 Old Meadow Road, Somos at McLean Metro will be developed in two phases. In the first phase, Tysons-based SCG Development will demolish an abandoned office building on the property and build 231 units, a mix of studio and one-, two- and three-bedroom apartments. The units will be rented to households earning between 30% and 60% of the area’s median income.

The second phase of the development will include 225 units, according to Steve Wilson, SCG Development’s president. The total development cost is about $108 million for the first phase and about $107 million for the second phase, he said.

The property is located within a 10-minute walk to the McLean Metrorail station and less than 10 minutes from Tysons’ new pedestrian bridge.

“Somos at McLean Metro Phase A will bring high quality affordable housing options to families and individuals in a very high barrier to entry market,” Wilson said in a statement.

Amazon.com provided a $28.97 million low-rate loan to the project from the Amazon Housing Equity Fund, a $2 billion commitment to create or preserve more than 20,000 affordable homes for low- to moderate-income families in the Arlington-Washington, D.C., area, Washington state’s Puget Sound region and the Nashville, Tennessee, region, locations where Amazon has offices.

HQ2, Amazon’s East Coast headquarters in Arlington County, began a phased opening in June 2023. Since January 2021, Amazon has committed over $1 billion in loans and grants to create or preserve 7,000 affordable homes in the region, according to the ecommerce giant’s website.

“We embrace opportunities to work in partnership with innovative organizations dedicated to creating much-needed affordable housing that connects individuals and families to transit, employment and other resources across the DMV,” Senthil Sankaran, managing principal of the Amazon Housing Equity Fund, said in a statement.

Virginia Housing, Virginia’s state housing finance agency, committed over $54.5 million in financing and 4% Low Income Housing Tax Credits, which the federal government uses to subsidize the acquisition and construction of affordable rental housing, to the project.

“Our investment towards Somos at McLean provides much needed increased affordable inventory in the Northern Virginia area,” Virginia Housing CEO Tammy Neale said in a statement.

In 2022, the Fairfax County Board of Supervisors approved $33.3 million to acquire the property and support the development of Somos at McLean Metro. The Fairfax County Redevelopment and Housing Authority will own the land and lease the property to affiliates of SCG Development.

“Innovative partnership has enabled us to leverage private equity to convert an unused office building site into hundreds of affordable homes in the Providence District,” Dalia Palchik, a member of the Fairfax County Board of Supervisors, said in a statement.

Capital One-Discover deal faces federal scrutiny

McLean-based Capital One Financial announced plans in February to buy Discover Financial Services for $35.3 billion in an all-stock deal that would mark Capital One’s largest ever acquisition and make it the nation’s biggest credit card lender.

The transaction is expected to close in late 2024 or early 2025, according to the banks. At close, Capital One shareholders would own about 60% of the combined company, and Discover shareholders would hold approximately 40%.

However, the deal must receive federal regulatory approval to move forward, and the Biden White House has fought consolidation of large corporations, including the proposed $3.8 billion merger of JetBlue Airways and Spirit Airlines, which was called off in March after the airlines lost an antitrust lawsuit. Although it’s the first bank merger of this size proposed during President Joe Biden’s term, he enacted an executive order in 2021 encouraging federal agencies with authority over banks, including the Federal Reserve and the Federal Deposit Insurance Corp., to update their guidelines on banking mergers “to provide more robust scrutiny.”

U.S. Sen. Sherrod Brown, chairman of the Senate Banking Committee, said in a statement following the Capital One-Discover announcement that “a rubber-stamped merger that makes powerful financial companies even bigger and more powerful will do nothing for families.” From both sides of the aisle, U.S. Sen. Elizabeth Warren, D-Massachusetts, and U.S. Sen. Josh Hawley, R-Missouri, urged the Biden administration to block the deal, with Hawley charging it would grant Capital One “unprecedented powers to extort American consumers.”

If the merger goes through, Capital One would use Discover’s credit card payment network to process transactions, instead of relying on Visa and Mastercard platforms. Also, with Discover’s banking business included, Capital One would have more than $450 billion in deposits.

“From Capital One’s founding days, we set out to build a payments and banking company powered by modern technology. Our acquisition of Discover is a singular opportunity to bring together two very successful companies with complementary capabilities and franchises, and to build a payments network that can compete with the largest payments networks and payments companies,” Capital One Chairman, CEO and founder Richard Fairbank said in a statement.

Illinois-based Discover has a market value of about $27.6 billion. Capital One has a market capitalization of about $52.2 billion and reported $34.25 billion in 2022 revenue.  

Deputy Editor Kate Andrews contributed to this story.

Top Five April 2024

The top five most-read daily news stories on VirginiaBusiness.com from Feb. 14 to March 13 were led by news that Danish toymaker Lego will delay production at its Chesterfield County facility until 2027.

1   |   Lego delays Chesterfield production start to 2027

Lego Group will begin production at its $1 billion manufacturing facility at Meadowville Technology Park at least a year later than originally announced. (Feb. 15)

2   |   Capital One to buy Discover in $35.3 billion deal

McLean-based Capital One Financial plans to acquire Discover Financial Services in an all-stock deal that would make Capital One the nation’s biggest credit card lender. (Feb. 19)

3   |   Dominion to sell 50% interest in Virginia Beach offshore wind farm for $3 billion

Dominion Energy reached an agreement to sell a 50% noncontrolling stake in its Coastal Virginia Offshore Wind project to investment firm Stonepeak. (Feb. 22)

4   |   Liberty University fined $14 million for underreporting campus crime

The U.S. Department of Education levied a record fine against Liberty in a settlement of alleged Clery Act violations by the Lynchburg-based Christian university. (March 5)

5   |   Norfolk looks to renovate Scope, Chrysler Hall instead of building arena

Norfolk is considering renovating the older city-owned venues rather than building anew arena at the former Military Circle Mall site. (Feb. 22)

Dominion Energy is selling a 50% noncontrolling stake in its $9.8 billion Virginia Beach offshore wind farm to Stonepeak. Photo by Mark Rhodes

Intelsat strikes $250M deal with Eutelsat Group

McLean-based satellite services provider Intelsat has committed to secure low-Earth orbit service for six years for $250 million from Paris-based Eutelsat Group’s OneWeb low-Earth orbit (LEO) constellation service, with an option for another $250 million, Intelsat announced Tuesday.

“We’ve been partnering with Eutelsat for quite some time now, leveraging its OneWeb LEO constellation to offer a multi-orbit solution, primarily in commercial aviation,” Intelsat CEO Dave Wajsgras said in a statement. In 2020, Intelsat purchased in-flight broadband connectivity provider Gogo Inc.’s commercial aviation business for $400 million, serving a customer base of more than 3,000 commercial aircraft.

Intelsat will provide direct design and functionality input to Eutelsat as it develops its Next Generation OneWeb constellation, according to the the company, “to help ensure that the new constellation will have the capabilities to meet real-world customer needs going forward.”   

The partnership between Intelsat and Eutelsat, Eutelsat Group CEO Eva Berneke said in a statement, “showcases the necessity in today’s world for major satellite operators to have the ability to offer multi-orbit solutions to their customers.”

Founded in 1964, Intelsat provides satellite-based communications to government, nongovernmental organizations and commercial customers. Last year, merger talks between Intelsat and Luxembourg-based competitor SES S.A. were called off. The merger was anticipated to have created a $10 billion global business. The McLean-based satellite operator emerged from Chapter 11 bankruptcy and financial restructuring in early 2022.

McLean AI health care startup raises $111M in Series A funding

McLean-based Zephyr AI has raised $111 million in a Series A funding round, the health care technology startup announced March 13.

The round included participation from about 30 investors, including Revolution Growth, Eli Lilly & Co., Jeff Skoll, and Epiq Capital Group, according to a news release and a Securities and Exchange Commission filing from the company. The raise started in October 2023.

Founded in 2020, Zephyr AI is leveraging artificial intelligence algorithms and tools to develop products and solutions supporting patients and providers and fueling research in the areas of oncology and cardiometabolic disease.

“The U.S. has the highest rate of avoidable cancer and cardiometabolic-related deaths among any high-income country. We must do better,” Grant Verstandig, Zephyr AI’s cofounder and executive chairman, said in a statement. “At Zephyr AI, we are harnessing the power of AI to extract novel insights to better define patient stratification and response predictions as well as improve federation of real-world data. With our world-class team, and the support of this investor group, we are deploying one of the largest clinicogenomic [clinical genomic] datasets that has unprecedented breadth across disease states and data partners. Collectively, we are now well-positioned to support our mission of democratizing precision medicine, enhancing both the speed and success of clinical trials.”

The funds raised will enable Zephyr AI to increase its analytical speed and fortify its training and validation sets, as well as support expansion of the company’s scientific and commercial teams to expedite delivery to the market.

The startup had two abstracts accepted for publication at the American Association for Cancer Research annual meeting in April in San Diego.

“We are excited to be part of this growing ecosystem of AI-enabled drug development and welcome the opportunity to attend [the annual meeting], where we will engage with the scientific community and present some of our emerging scientific insights from our platform,” Jeff Sherman, Zephyr AI co-founder, interim CEO and chief technology officer, said in a statement.

In March 2022, Zephyr AI raised $18.5 million in a seed round.