Maximus Inc. , a provider of government services, said Wednesday it has agreed to acquire the parent company of Veterans Evaluation Services Inc. for $1.4 billion. The privately held VES serves the U.S. federal government as a provider of Medical Disability Examinations to determine Veterans’ eligibility for compensation and pension benefits. The deal is expected to close in Maximus’ fiscal third quarter. The deal “furthers a core element of Maximus’ long-term corporate strategy to increase revenue attributable to providing independent and conflict free clinical business process outsourcing (BPO) services at scale,” Maximus said in a statement. The company posted revenue of $535 million from assessments and appeals, equal to 15% of total revenue, in fiscal 2020. It expects to boost that share to about 25% with the VES deal. VES is expected to generate revenue of $160 million to $175 million in the last four months of fiscal 2021, equal to an annual run rate of $480 million to $525 million. Maximus shares were not active premarket, but have gained 29.7% in the year to date, while the S&P 500 has gained 10%.

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