Leidos shed its scanners; Blackstone just lent $1 billion against them
Blackstone Credit & Insurance is leading $1 billion of private credit for the security-screening venture Leidos carved out of its $17.2 billion group. Leidos was paid in equity it cannot force anyone to buy before October 2033, and the debt now sits on private lenders' books.
Vincent Jiang · 3 min read
The billion behind the baggage scanners
Blackstone−3.31% — Blackstone, down 3.31 percent today Credit & Insurance (BXCI) said on October 12 that it is leading $1 billion of financing for the combination of Analogic, the Salem, New Hampshire imaging maker, with the Security Enterprise Solutions, Ports & Borders and Industrial Automation businesses of Leidos−1.41% — Leidos, down 1.41 percent today, the Reston, Virginia government contractor 1. HPS Investment Partners, a private-credit investment firm, joined Bank of America and Wells Fargo as joint lead arrangers, arranging and holding the paper themselves: private credit, not a syndicated bank loan 12. The combination had closed on October 5 4.
Equity out, no check in
The businesses Leidos contributed carry about 1,500 employees and roughly $625 million of projected 2026 revenue, a sliver of a group that reported about $17.2 billion for the fiscal year ended January 2, 2026 368. Leidos exchanged them for 41.5% of the equity of the venture, registered as Nickel JV Ultimate Parent, LLC 4. Affiliates of Altaris, the healthcare investor that took Analogic private for $1.1 billion in 2018, took 58.5% and sold their remaining Analogic shares to the venture for cash raised from the new debt 24. The closing cash went to Altaris entities, not to Leidos.
Group revenue reached $4.6 billion, a three-year high, before the carve-out
Data
| Quarterly revenue | |
|---|---|
| Q3 '23 | $3.92B |
| Q4 '23 | $3.98B |
| Q1 '24 | $3.98B |
| Q2 '24 | $4.13B |
| Q3 '24 | $4.19B |
| Q4 '24 | $4.37B |
| Q1 '25 | $4.25B |
| Q2 '25 | $4.25B |
| Q3 '25 | $4.47B |
| Q4 '25 | $4.21B |
| Q1 '26 | $4.4B |
| Q2 '26 | $4.56B |
Locked in until after October 2033
Altaris's funds appoint a majority of the board, decide distributions of available cash, which must be made at least annually, and hold drag-along rights: the power to force Leidos to sell its stake in a sale of the venture 4. Leidos can tag along if its partner sells, but its right to demand an exit begins only after the seventh anniversary of closing, in October 2033 4. The stock Leidos holders still own traded at $117.74 in the closing week, down 34.1% for the year 5.
Whose money priced the scanners
BXCI managed $443 billion at the end of 2025, and its insurance platform manages portfolios for insurers' general accounts; institutional and insurance clients supply about three-quarters of the assets on Blackstone's credit platform 7. Which funds hold this loan, and what it pays, was not disclosed 7.
The demand underneath is real: Leidos kept adjacent screening work, including a potential $672.5 million Transportation Security Administration award in September 6. Analogic chief executive Tom Ripp calls the combination a stronger, more capable company, and Leidos chief executive Tom Bell says the carve-out sharpens the focus of the NorthStar 2030 strategy 38. None of it prices what 41.5% of the venture is worth.
What to watch next
Leidos closes its fiscal quarters on the Friday nearest the quarter mark, so the third quarter ended on October 2, three days before the combination 9. That quarter's report is the last to fold the screening units into group revenue, and the first without them ends in January 2027 9. Leidos is expected to report the stake as an equity-method investment, booking its share of the venture's profit rather than the units' full sales, and it has not said when that switch happens 5.
Watch whether the Altaris-controlled board declares a distribution, and whether the loan's pricing ever surfaces 47. Leidos cannot demand a sale of its 41.5% before October 2033, and until then the venture pays its holders only what that board chooses to distribute 4.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
