QinetiQ Group plc QinetiQ acquires Meggitt Target Systems (4246S)
December 21 2016 - 2:00AM
UK Regulatory
TIDMQQ.
RNS Number : 4246S
QinetiQ Group plc
21 December 2016
QinetiQ enhances position in global test and evaluation through
acquisition of Meggitt Target Systems
21 December 2016 - QinetiQ announces this morning that it has
acquired Meggitt Defence Systems Limited and Meggitt Holdings
Canada Inc. (together "Meggitt Target Systems") from Meggitt for
GBP57.5 million on a cash-free, debt-free basis.
Meggitt Target Systems is a leading international provider of
unmanned aerial, naval and land-based target systems and services
for test and evaluation ("T&E") and operational training and
rehearsal. The business is expected to generate approximately GBP28
million of revenue and approximately GBP5.5m of operating profit in
the year to 31 December 2016.
Meggitt Target Systems provides target systems to approximately
40 countries from its operations in the UK and Canada, and performs
on-site target services in 15 of those countries. It will form part
of QinetiQ's new International business unit and will be reported
within QinetiQ's Global Products division.
Strategic rationale
-- Meggitt Target Systems holds a leading position in the
growing global target systems and services market
o Meets increasing global demand for high-fidelity threat
representation to validate defence and security capabilities
against current and future threats
o Generates 90% of its revenue from outside the UK
-- Opens new routes to market to accelerate QinetiQ's international growth
o Establishes a design and manufacture capability in Canada
o Adds multiple customer relationships in Europe, Asia and North
America
-- Strengthens QinetiQ's ability to deliver world-class test and evaluation
o Adds cost effective unmanned aerial, naval and land-based
target systems and services
o Accelerates the modernisation of T&E services through the
integration of threat representation with QinetiQ's existing
capabilities
Financial highlights
-- Acquisition of a highly cash generative and growing business
-- Expected to be EPS accretive in the first full year of ownership
-- Returns exceed QinetiQ's cost of capital within three years
-- Financed from existing cash resources
Steve Wadey, QinetiQ CEO, said: "This acquisition accelerates
the delivery of our strategic priorities to drive growth of our
core capabilities in international markets, and to modernise and
strengthen our ability to deliver world-class test and evaluation
services."
"Meggitt Target Systems is a distinctive business with a strong
management team and employees in Canada and the UK who are experts
in the development and delivery of unmanned target systems and
services. We know the business well having worked together for the
past decade and I am delighted to welcome the team to QinetiQ."
This announcement contains inside information and the person
responsible for making this announcement is Jon Messent, Company
Secretary.
There will be a call for QinetiQ analysts and investors at 0745
hours UK time on 21 December 2016.
Dial in details: +44 (0) 20 3003 2666 Password: QinetiQ.
ENDS
Notes for Editors:
About QinetiQ:
QinetiQ is a leading science and engineering company operating
primarily in the defence, security and aerospace markets. We work
in partnership with our customers to solve real world problems
through innovative solutions delivering operational and competitive
advantage.
About Meggitt Target Systems:
Meggitt Target Systems' core capability is in the provision of
unmanned aerial, naval and land-based target systems and associated
turnkey services for test and evaluation as well as operational
training and rehearsal. The business has a broad range of non-ITAR
restricted unmanned targets across multiple domains, including jet
and propeller aircraft, rotary wing aircraft, land targets and high
speed naval craft. It designs the command, control and avionics
systems for its products and is able to provide bespoke integration
solutions for individual customer requirements. For more
information see: https://meggitttargetsystems.com/en-ca/
Gleacher Shacklock, Grant Thornton and Osborne Clarke provided
advice to QinetiQ on the acquisition of Meggitt Target Systems.
For further information please contact:
Media relations: QinetiQ press office +44 (0) 1252 393500
Investor relations: David Bishop, QinetiQ +44 (0) 7920
108675
This information is provided by RNS
The company news service from the London Stock Exchange
END
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