Leidos acquires Chantilly AI tech biz for $300M

Reston-based federal contractor Leidos announced Wednesday it has acquired Kudu Dynamics, a Chantilly-based tech company that builds AI-powered cybersecurity tools for defense customers, for $300 million.

This is Leidos’ first acquisition in more than two years and its first since Thomas A. Bell became the Fortune 500 defense, aerospace and IT firm’s CEO.

“Kudu’s ability to generate new cyber capabilities with AI perfectly complements our strategy to rapidly grow differentiated offensive cyber technology capabilities,” Bell said in a statement. “This acquisition underlines Leidos’s commitment to continue to build smarter full-spectrum cyber capabilities, so that the U.S. and its allies dominate the cyber warfighting domain.”

The all-cash purchase closed May 23, Leidos said in its announcement.

Kudu Dynamics was founded in 2013 and has worked with the Department of Defense, focusing on automated targeting, scalable hardware reverse engineering and generation of nonkinetic effects, which allow military forces to disrupt adversaries with cyberattacks or other means that minimize casualties.

“We’re excited to deliver the next level of capabilities to our customers as we bring together the highly innovative cyber professionals and disruptive technologies of Kudu with the scale, resources and experience of Leidos,” said Kudu Dynamics founder and CEO Mike Frantzen. “In Leidos, we’ve found a partner who shares our ethic of purposeful innovation in support of our nation’s most critical missions.”

Frantzen will continue to lead Kudu’s 170-employee team as a wholly owned subsidiary in Leidos’ national security sector, a Leidos spokesperson said Wednesday.

The acquisition comes as Leidos has focused more attention on artificial intelligence, including appointing its first chief AI officer, Ron Keesing, in July 2024.

Leidos has 47,000 employees worldwide, and in the fiscal year that ended Jan. 3, it reported $16.7 billion in revenue. Earlier this month, the U.S. Department of Homeland Security struck a costly blow against the federal contractor, terminating a $2.4 billion IT and cybersecurity contract awarded last year, known as the Agile Cybersecurity Technical Security (ACTS) contract.