Carlyle Buys Booz Allen Unit In Bid to Tap Boom in Defense

WASHINGTON -- Two of the capital's best-connected companies have reached a $2.54 billion deal that showcases the lucrative market for carrying out sensitive military and intelligence work on behalf of the federal government.

The Carlyle Group, whose roster of advisers once included former President George H.W. Bush, is buying a majority stake in the U.S. government business of Booz Allen Hamilton Inc. With its deep ties to the defense establishment -- the director of national intelligence is a former executive -- Booz Allen has become embedded in a wide range of military operations such as planning wargames.

The U.S. government ...