27th May 2025 09:28
(Alliance News) - Serco Group PLC on Tuesday said it has completed the GBP264 million acquisition of Northrop Grumman's mission training and satellite ground network communications software business, MT&S.
Hampshire, England-based Serco is a government services outsourcing provider, focused on defence, justice & immigration, transport, health & other facilities management and citizen services.
Serco said the deal has now received necessary regulatory approvals.
MT&S provides the US military with advanced mission training services, and software that makes satellite ground networks more efficient. It supports programmes across the US Army, Space Force, Air Force, Navy, Combatant Commands and international partners.
Serco said it will benefit from around seven months of MT&S' financial performance in 2025, which will contribute an estimated USD175 million of revenue and USD20 million of underlying operating profit.
The transaction will be mid-single digit accretive to underlying earnings per share in 2026, the first full year of ownership, Serco added.
Chief Executive Anthony Kirby said: "Following this acquisition, defence will be our largest sector, representing approximately 40% of group revenue, with operations in all our major geographies. North America will represent approximately 50% of group underlying operating profit.
"This acquisition, our fifth in defence since 2019, strengthens our position for future organic growth through increased scale, our breadth of solutions and builds upon the excellent new business and retentions we have secured in defence so far in 2025."
The firm updated its guidance to reflect the anticipated contribution from MT&S in 2025. Revenue is expected at around GBP4.8 billion, unchanged from prior guidance and broadly flat compared to GBP4.79 billion a year ago.
Underlying operating profit guidance was also unchanged at approximately GBP260 million, down from GBP274 million in 2024.
Shares in Serco were down 0.2% at 186.30 pence in London on Tuesday morning.
By Michael Hennessey, Alliance News reporter
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.
Related Shares:
Serco