Acquisition of Air Affairs & disposal of Space NV

RNS Number : 5053B

QinetiQ Group plc

03 October 2022

 

News release

QinetiQ Group Plc

Delivering on our strategic ambition:
Acquisition of Air Affairs and disposal of Space NV

03 October 2022 - QinetiQ Group plc ("QinetiQ" or the "Company") announces it has reached an agreement to acquire Air Affairs (Australia) Pty Ltd ("Air Affairs") in Australia for a cash consideration of A$53m (£31m¹). QinetiQ also announces that it has reached an agreement to sell QinetiQ Space NV ("Space NV") in Belgium to Redwire Space Europe for a cash consideration of €32m (£28m²).

QinetiQ has set out a clear strategy to focus on its six distinctive offerings and align its capital deployment to its three home countries: US, UK and Australia. Following the announcement in August of the acquisition of Avantus in the US, the two transactions announced today further demonstrate our strategy and capital allocation policy in action: the proceeds from a non-core asset releases capital to reinvest in a more strategically aligned business to support and drive our continued focus to build an integrated global defence and security company, delivering growth and good shareholder returns.

Acquisition of Air Affairs to support long-term growth strategy in Australia

The acquisition of Air Affairs is an exciting step to further build and accelerate QinetiQ in Australia, growing our test and evaluation (T&E) and threat representation capability globally.

Air Affairs is an Australian defence services company - a leader in air threat representation, T&E, unmanned targets and mission rehearsal. Air Affairs provides targets and training services, and electronic warfare capabilities to the Australian Defence Force, as well as aerial surveillance and reconnaissance in support of government firefighting efforts. It owns and operates a fleet of special mission aircraft and maintains an advanced manufacturing and engineering facility providing design, manufacture and certification operations. Air Affairs employs c.180 people, headquartered in Nowra, New South Wales.

The acquisition of Air Affairs further establishes QinetiQ as a long-term, strategic partner to the Australian Defence Force and underpins QinetiQ's strategic position as market leader in T&E and air threat representation, now with a significant presence across the UK, Canada and Australia, and training and special operations in Germany.

In the 12 months to 30 June 2022, Air Affairs delivered A$43m revenue, EBITDA of A$5m (on IFRS-16 basis) and will be reported within EMEA³ Services.

Disposal of Space NV demonstrates greater focus of our strategy

QinetiQ continually reviews its portfolio of businesses for their contribution and alignment with the global strategy of the Group. Space NV is an attractive and well-positioned business in the commercial space sector, which has delivered good operational performance and growth under QinetiQ's ownership. Whilst the space domain remains an integral part of our core defence and security strategy, Space NV products provide limited operational synergies and alignment with our global ambition - QinetiQ is therefore delighted to have announced the sale of Space NV to Redwire Corporation, who can provide greater synergies and relevant market access to enable future growth of the business and new opportunities for its employees.

Space NV is a Belgium-based commercial space business providing design and integration of small commercial satellites, docking and berthing systems, and instruments for end-to-end space missions; its principal customer is the European Space Agency. In the year ended 31 March 2022 Space NV generated revenue of €49m and EBITDA of €5m, and has been reported within Global Products.

Steve Wadey, Group Chief Executive Officer of QinetiQ, said:

"Following our announcement to acquire Avantus in the US in August, the acquisition of Air Affairs in Australia is a further exciting opportunity to accelerate our growth and reinforces our market leading position in test and evaluation, and air threat representation globally. Today's acquisition and disposal announcement reinforces the focus of our growth strategy on our six distinctive offerings in our three home countries, delivering mission critical solutions for our customers."

Notes

Kroll Securities Ltd acted as financial advisor to QinetiQ on the disposal of Space NV. We expect both transactions to complete within 6 weeks.

FY23 Interim Results

QinetiQ will publish its Q2 Trading Update on Wednesday 12^th October and its full Interim Results on Thursday 10^th November 2022.

About QinetiQ

QinetiQ (QQ.L) is a leading science and engineering company operating primarily in the defence and security markets. We work in partnership with our customers to solve real world problems through innovative solutions delivering operational and competitive advantage. Visit our website www.QinetiQ.com . Follow us on LinkedIn and Twitter @QinetiQ.  Visit our blog www.QinetiQ-blogs.com .

For further information please contact :

John Haworth, Group Head of Investor Relations:	[phone]
Lorna Cobbett , Citigate Dewe Rogerson (Media enquiries)	[phone]

[1] FX rate of 1.70 AUD: 1 GBP

[2] FX rate of 1.14 EUR: 1 GBP

[3] EMEA: Europe, Middle East and Australasia

 

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