Booz Allen Defeats DOJ’s Latest Bid to Halt Merger Pending Appeal

The Justice Department lost its latest effort to pause Booz Allen Hamilton’s $440 million acquisition of competitor EverWatch while it considers appealing an order allowing the deal to proceed.

The government filed its request for a pause hours after the deal closed Oct. 14, so “that ship has sailed,” Judge Catherine C. Blake of the US District Court for the District of Maryland wrote Oct. 31 in denying the motion.

The Justice Department’s antitrust division had asked again to pause the merger pending appeal after losing its motion for a preliminary injunction earlier in the month. Blake also rejected the government’s request for the court to “hold all assets separate” in the event the deal closed because it lacked clarity.

The government moved to block the deal between Booz Allen and defense firm EverWatch in June, arguing that their merger would monopolize the market for a sensitive signals intelligence contract with the National Security Agency dubbed Optimal Decision. DOJ attorneys previously asked Blake to issue a preliminary injunction pausing the deal until the parties could proceed with a full trial, but she denied the request Oct. 11.

Signaling what they saw as grounds for a potential appeal, government attorneys argued that the court erred in ruling that the market for such signals intelligence work was broader than just between the two companies. Blake in her Oct. 31 memorandum slapped that idea down, saying that while the government’s market definition “is convenient for litigation,” it ultimately fails under economic reasoning.

The window to submit bids for the contract is nearly over, Blake pointed out. Once the final bids are submitted, “the window for any potential anticompetitive effect will be closed,” she said.

“Neither the NSA nor the Government have any concern with Booz Allen’s acquisition beyond OPTIMAL DECISION,” Blake wrote. “Entering the Government’s request for relief would significantly harm the defendants while offering little to the public interest.”

The case is United States of America v. Booz Allen Hamilton Inc. et al, D. Md., no. 1:22-cv-01603, 10/31/22.