23 September 2004
23 September 2004
QinetiQ has signed a purchase agreement with St Louis-based Westar Aerospace & Defence Group Inc, one of the US's leading providers of aerospace technology solutions.
The £72.2m ($130m) US acquisition, which is subject to US regulatory approval, is QinetiQ's second this month, and will increase its US topline to some $290m.
""This is another key step to delivering our strategy of expanding into the US defence and security markets,"" says Sir John Chisholm, QinetiQ's chief executive officer. ""Our strategy has been to acquire strongly-growing companies which have specific expertise in taking technology through to the markets. Westar is such a company, with a track record of 38 per cent annual growth during the last five years. Our first acquisition, Foster-Miller Inc, has also recorded compound annual growth of around 30 per cent in the last four years. These achievements are considerable, and our aim is to provide support to both companies so that they can build on this success.""
He continues: ""The development of our business in the US is one of three strategic directions for the business, the others being further development of our core UK defence business and the commercialisation of our defence technologies. We intend to spend the next year bringing our acquisitions successfully into the QinetiQ Group before we consider the possibility of an IPO.""
Rob Topping, Westar's president, says: ""This agreement represents a huge opportunity for our customers, our employees and our company. By partnering with QinetiQ, our engineers, software developers and analysts can offer additional technology solutions and meet the evolving needs of the Department of Defence and our other customers.""
Westar, which has around 900 staff, forecasts revenues of around £77.8m ($140m) in FY2004. The company provides engineering, software and logistics services to the aerospace industries, primarily to the US Department of Defense. It will become a wholly-owned subsidiary of QinetiQ North America and will remain autonomous, retaining its name, core management team, employees and US facilities.
QinetiQ's annual results highlighted a 28 per cent rise in operating profits before exceptionals to £56.7m ($102.1m) on turnover which rose by three per cent to £795.4m ($1.43 billion) and EBITDA of £94.3m ($169.8m). In percentage terms, QinetiQ saw its highest levels of growth in the US, generating around £23m ($40m) in orders during the last financial year. The company's two US transactions are expected to close later this year and are subject to customary regulator approvals.
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