27th May 2014 07:21
LONDON (Alliance News) - QinetiQ Group PLC said Tuesday that it had completed the sale of its US Services division to The SI Organisation Inc for an initial consideration of USD165 million.
The sale was first announced in April and has a potential earn-out of up to USD50 million in addition. The earn-out, which is conditional on the divisions gross profit performance, is expected no earlier than end-March 2015.
Following the sale, the technical support services company said it will pay GBP6 million into its pension scheme and pay off its remaining USD248 million of private placement debt.
It will now begin its previously announced share buy-back of GBP150 million. QinetiQ expects the sale, share buyback and debt repayment to be earnings enhancing.
Following the sale of the division, it expects to be better positioned to see an increase in sustainable earnings from its organic-plus growth strategy.
Shares in QinetiQ were trading up 0.5% at 198.00 pence early Tuesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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