QinetiQ to sell its American arm for $215 million
Britain's defence group QinetiQ has confirmed that it has agreed to sell its American services division to the SI Organization Inc. for $215 million.
QinetiQ North America Services & Solutions Group is one of the leading providers of differentiated, engineering services and solutions to the United States' Federal Government. Virginia-based QinetiQ North America Services & Solutions Group employs 2,800 engineers, scientists and other professionals.
The British defence group said the deal would allow it to save up to £12 million in financing costs by slashing its final £150 million of private debt. The group also announced its decision to return £150 million to shareholders via a new share buyback.
CEO Leo Quinn claimed that the sale of the American division to SI Organization was the best way to maximise value for the company's shareholders.
Announcing the deal, Quinn 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."
The group will be able to retain a significant footprint in the North American market through its Global Products arm and Cyveillance business.
QinetiQ has been struggling to make its investments pay off since the government announced huge cuts to its defence budget. The company first mooted the sale of its American division in May last year, when the division's value was written down by £256 million.
Following the announcement of the sale on Tuesday, QinetiQ shares shed 1.7p to close at 219p.