By Mike Stone and Greg Roumeliotis
Nov 11 (Reuters) - Britain's BAE Systems Plc is inadvanced talks to sell its U.S. manpower and services businessesto private equity firm Veritas Capital Management LLC for morethan $1 billion, according to people familiar with the matter.
Were an agreement to be reached, BAE would be the latestdefense contractor to shed its less-profitable governmentconsultancy operations in response to lower military spending.
Veritas made a new bid for the assets after BAE's efforts tosell them to another government services contractor, LeidosHoldings Inc, proved unsuccessful, the people said thisweek.
Veritas is still trying to secure financing for theacquisition and a deal is not certain, the people added.
The sources asked not to be identified because thenegotiations are confidential. BAE and Veritas declined tocomment, while Leidos did not respond to a request for comment.
BAE announced in April it would conduct a review of thebusinesses, which offer government staffing and informationtechnology services, after it received expressions of interestfrom third parties it did not identify. In July, BAE's CEO saidthe company was in no rush to sell.
"These are not businesses that we have to sell. It is not afire sale... It is important to note the transaction will onlyoccur if it creates value for our shareholders," BAE ChiefExecutive Ian King said on an earnings call with analysts onJuly 30.
The company has also said a sale would not affect the restof its U.S intelligence and security businesses, or its cybersecurity operations.
Other large defense contractors have also soured on thestruggling government services sector. Lockheed Martin Corp, for example, said earlier this year that it plans tosell or spin off information technology and services businessesthat generate $6 billion in annual revenue.
New York-based Veritas Capital had amassed a portfolio ofgovernment services providers. In July, Veritas acquired McLean,Virginia-based Alion Science and Technology Corp an engineeringsolutions and services that address problems relating tonational defense and homeland security. (Reporting by Mike Stone and Greg Roumeliotis in New York;Editing by David Gregorio)