QinetiQ Divests Non-Core US Federal IT Services Business
Why we think this is good
The divestment of QinetiQ's non-core US Federal IT Services business is a positive strategic move that aligns with the company's focus on its core market segments in the US. The transaction is expected to complete in a timely manner, and the proceeds will support QinetiQ's ongoing buyback programme and reduce net debt, which is beneficial for shareholders. While the valuation of approximately 1x revenue seems reasonable, the RNS does not provide detailed financial information, limiting a more comprehensive assessment.
Key Points
- QinetiQ to sell non-core US Federal IT Services business to V2X for $31m
- Divestment is part of QinetiQ's US restructuring programme
- Proceeds will support ongoing buyback programme and reduce net debt
- Transaction expected to complete before end of September
- Divestment reinforces QinetiQ's focus on four core US market segments
Summary
QinetiQ Group plc has reached an agreement to sell its non-core Federal IT Services business in the US to V2X for an EV consideration of $31m, representing approximately 1x revenue. The divestiture is part of QinetiQ's US restructuring programme and will support the company's ongoing buyback programme and reduce net debt. The transaction is expected to complete before the end of September. This disposal reinforces QinetiQ's focus on four core market segments in the US: maritime systems, advanced sensors, space and missile defence mission support, and persistent surveillance, each with good long-term growth potential.