Business
UK’s Serco strengthens U.S. defence business with $295 million WBB purchase
Published by linker 5
Posted on February 16, 2021
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Published by linker 5
Posted on February 16, 2021
(Reuters) – British outsourcer Serco said on Tuesday it would buy consulting services provider Whitney, Bradley & Brown Inc (WBB) from an affiliate of H.I.G. Capital for $295 million to bolster its North American defence business.
The acquisition will strengthen the company’s capabilities in areas such as Artificial Intelligence, machine learning, data analytics and cyber consulting, Serco said.
“WBB takes our North American defence revenues to around $1.1 billion and gives us credible positions in other parts of the market…” Serco Group Chief Executive Rupert Soames said in a statement.
The acquisition of the Naval Systems Business Unit of Alion in 2019 had increased the size of Serco’s U.S. Navy business by 70%, Soames said.
Shares of the mid-cap company, which said the acquisition would boost underlying earnings per share by around 10% in 2022, the first full year of ownership, jumped about 9% in early trade.
WBB provides advisory, engineering and technical services to the U.S. military, and the Serco deal, expected to complete in the second quarter of 2021, will be funded through existing debt facilities, the company said.
WBB Chief Executive Robert Olsen will become a senior vice president of the new Serco business unit.
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Sriraj Kalluvila)