09 September 2004
09 September 2004
QinetiQ, Europe's largest science and technology organisation, has signed a purchase agreement with Foster Miller Inc, the Boston-based engineering, composite and technology development company.
The 91.8m GBP ($163m) deal, which is subject to regulatory approval, represents QinetiQ's first US acquisition.
""Strategically, the acquisition of Foster-Miller will be key to achieving QinetiQ's goal of growing our US business significantly,"" comments Dr David Anderson, President and CEO of QinetiQ Inc, QinetiQ's US subsidiary.
""Foster-Miller is a remarkable fit with QinetiQ, both technologically and culturally. A recognised leader in providing innovative engineering solutions in fields such as robotics, advanced materials technology and medical devices, its complementary R&D work and broad range of customers will undoubtedly accelerate QinetiQ's expansion into the world's largest market for advanced technologies.""
He continues: ""In percentage terms, QinetiQ saw its highest levels of growth in the US, generating around $40m in orders during the last financial year. We are therefore very well-positioned to take advantage of the opportunities offered by this strategic acquisition.""
According to Dr William Ribich, President and CEO of Foster-Miller: ""The skill sets of our two companies are uniquely complementary. This acquisition will be a prime opportunity for Foster Miller to add new personnel, technology and financial resources. This will allow continued expansion and growth in the commercial and defence markets in the US, UK and worldwide.""
Foster-Miller had revenues of around 67.6m GBP($120m) and EBITDA of 12.9m GBP($22m) in FY2003/4, and has seen compound growth of around 30 per cent per annum over the last four years. It will maintain its name and premises, and will operate as a subsidiary of QinetiQ North America. Recently named one of the most innovative businesses in America by Inc. magazine, the company provides a range of specialised services to the military and industry. For example, its TALONTM robots have conducted over 10,000 bomb disposal missions in Iraq to date, and it is the world's largest supplier of add-on armour for military transport aircraft. The company also works with pharmaceutical giant Pfizer, providing automation based on its robotics technology.
The partnership will enable Foster-Miller to introduce QinetiQ's technologies into US markets. For example, QinetiQ has complementary expertise in robotics, the development of specialist equipment for military aircrew and super-strength nets - QinetiQ's X-Net and Foster-Miller's BoatTrap bring motor vehicles and boats respectively to a standstill while minimising the risk to onlookers and security personnel.
""This is a partnership where the whole really will be greater than the sum of its parts,"" says Foster Miller's Dr Ribich. ""Separately, we are leaders in a number of technologies. Together, we can be world-beating.""
QinetiQ's annual results for 2003/4 highlighted a 28 per cent rise in operating profits before exceptionals to 56.7m GBP ($100.7m) on turnover which rose by three per cent to 795.4m GBP($1.41bn), as well as an operating cash inflow of £130.7m ($232.1m). QinetiQ's strong financial performance since moving into the private sector, especially last year's significant increase in cash flow, has facilitated its growth by acquisition in the US and UK, including the acquisition of UK technology firm HVR Consulting in August 2004.
The transaction between QinetiQ and Foster-Miller is expected to close later this year and is subject to customary regulator approvals.
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