22nd Apr 2014 07:51
LONDON (Alliance News) - QinetiQ Group PLC subsidiary, QinetiQ US Holdings Inc, has entered into a conditional agreement to sell QinetiQ Group's US Services division for an initial USD165 million deal.
The agreement, which is set to complete in the second quarter of 2014, will see the US Services division sold to The SI Organisation Inc for an initial cash consideration of USD165 million plus a potential earnout of up to USD50 million in cash, following a market testing exercise that attracted a number of interested parties, said the firm.
Following completion of the deal, QineticQ said it intends to return GBP150 million to shareholders by way of an on-market share buyback.
In a statement, the firm said its board believes the transaction will better position the Group to deliver an increase in sustainable earnings through its Organic-Plus strategy, making it a stronger, more focused group, it said.
"Our strategic review concluded that the sale of the US Services division represents the best route to maximise value for our shareholders from these assets, while retaining a significant footprint in North America for the Group through our Global Products division and Cyveillance business," said Leo Quinn, the Group's Chief Executive.
JP Morgan Cazenove and UBS Investment Bank are jointly acting as financial advisers, corporate brokers and sponsors to QinetiQ Group.
The company said at the end of March that it was on track to deliver on its own expectations for the financial full-year as its EMEA Services unit was continuing to perform well, buoyed by projects it is doing outside its traditional UK markets. Full-year results are due May 22.
Shares in the company were trading marginally lower Tuesday morning, down 0.41% at 22.7 pence per share.
By Alice Attwood; [email protected]; @AliceAtAlliance
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