DOJ sues to block Booz Allen’s EverWatch acquisition

The Booz Allen Hamilton logo is seen on a building in Annapolis Junction, Maryland, on March 11, 2019. (Photo by Jim WATSON / AFP) (Photo credit should read JIM WATSON/AFP via Getty Images)(AFP via Getty Images/JIM WATSON)

The Department of Justice has filed an antitrust lawsuit to block Booz Allen Hamilton’s planned acquisition of Reston, Virginia-based government cybersecurity contractor EverWatch.

The DOJ contends the acquisition would eliminate competition between the only two competitors for a critical national security support service.

McLean, Virginia-based Booz Allen, the largest government IT contractor in the D.C. region, announced plans to acquire EverWatch in March for an undisclosed sum. The merger would expand Booz Allen’s national cybersecurity work for software development and analytics, and its workforce with the highest security clearances.

Booz Allen and EverWatch are the only competing bidders for an NSA contract for signals intelligence, a surveillance-gathering method of intercepting communications.

The DOJ’s complaint said the merger would immediately reduce each companies’ incentive to bid aggressively, and would substantially lessen competition.

“Booz Allen’s agreement to acquire EverWatch imperils competition in a market that is vital to our national security,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s antitrust division. “Both the acquisition agreement and the underlying transaction violate federal antitrust laws.”

EverWatch is a portfolio company of Enlightenment Capital. It was founded in 2017. At the time of the acquisition announcement, Booz Allen said it expected the acquisition to close by the end of June.

Jeff Clabaugh

Jeff Clabaugh has spent 20 years covering the Washington region's economy and financial markets for WTOP as part of a partnership with the Washington Business Journal, and officially joined the WTOP newsroom staff in January 2016.

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