Engineering group QinetiQ saw shares rise on Wednesday after announcing the acquisition of Meggitt Defence Systems, in a deal worth £57.5 million.
International aerospace group Meggitt has sold its drone targets business to QinetiQ, which is expected to generate approximately £28 million of revenue and approximately £5.5m of operating profit in the year to 31 December 2016. Meggitt Defence Systems is based in the UK and Canada and delivers services to 15 markets.
Steve Wadey, QinetiQ CEO, said: “This acquisition accelerates the delivery of our strategic priorities to drive growthof 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.”
Meggitt Defence Systems has long-standing ties to the UK Ministry of Defence, supplying proven target systems to the world market; the Banshee 200-knot aerial target system has been in service and fully integrated at UK ranges since 1987.
Meggitt said the sale was “consistent with Meggitt’s strategy to focus on businesses of scale in attractive markets where our leading positions offer greater potential for growth and operational efficiencies”.
QinetiQ Group (LON:QQ) are currently trading up 4.51 percent on the news at 259.80.