QinetiQ's acquisitions of US-based Foster-Miller and that of Westar both get the regulatory "green light"

QinetiQ has now received US regulatory approval for the acquisitions of both Foster-Miller Inc for $163m (£90m) announced on 08 September and that of Westar Aerospace & Defense Group for $130m (£70m) announced just a week later on 14 September. Both will remain autonomous, retaining their names, core management teams, employees and US facilities, operating as wholly owned subsidiaries of QinetiQ North America.

"These are key steps to delivering our strategy of expanding into the US defence and security markets," says Sir John Chisholm, QinetiQ's chief executive officer. "Our strategy has been to acquire strongly-growing companies which have specific expertise in taking technology through to the markets. The development of our business in the US is one of three strategic directions for the business, the others being further development of our core UK defence business and the commercialisation of our defence technologies. We have already identified significant opportunities to improve service to our customers on both sides of the Atlantic through cooperation between our newly acquired companies in the US and our more established businesses in the UK."

Boston-based Foster-Miller Inc will have revenues in excess of $120m (£65m) in FY04 and has enjoyed a compound growth of around 30 per cent per annum over the last four years. Founded almost 50 years ago, this engineering and technology development company has a staff of more than 350 and in addition to being an important provider of research and development services to the US Department of Defense, is also a manufacturer of military and industrial robots and of appliqué armour.

St Louis-based Westar Aerospace & Defense Group Inc was founded in 1986 and is a leading provider of engineering, software and logistics services to the US Department of Defense, particularly in the areas of army aviation and ballistic missile defence. It has around 900 staff and will have revenues of over $140m (£75m) in FY04. It has also been growing strongly over the past few years.

QinetiQ plans to appoint additional US directors to sit on both the Foster-Miller Inc and Westar Aerospace & Defense Group boards within the next few weeks to assist in developing and implementing its US expansion strategy.

QinetiQ's annual results highlighted a 28 per cent rise in operating profits before exceptionals to £56.7m ($105m) on turnover which rose by three per cent to £795.4m ($1.5 billion) and EBITDA of £94.3m ($170m). In percentage terms, QinetiQ saw its highest levels of growth in the US, generating around £23m ($40m) in orders during the last financial year.

Notes for Editors:

• QinetiQ (pronounced ki' ne tik as in 'kinetic energy') is Europe's largest science and technology solutions company, with a turnover of £795.4m ($1.43bn) in 2003/4. It employs over 9,000 staff, including many of the UK's leading scientists and internationally acclaimed experts. Founded from the laboratories of the UK Ministry of Defence (MOD), today QinetiQ operates in markets as diverse as marine, energy, telecommunications, automotive, rail, electronics, defence, space, health, oil & gas, aerospace and information technology. QinetiQ's facilities include laboratories, clean rooms, indoor and outdoor ranges, wind tunnels, marine testing facilities, automotive test tracks and climatic testing facilities. QinetiQ's heritage covers the pioneering research and development of many household technologies such as liquid crystal displays (LCDs), carbon fibre, the technology for flat panel speakers, infra-red sensors and microwave radar, a life saving foetal heart monitoring system, plus other significant advancements in the areas of defence, security, transport and healthcare. Visit www.QinetiQ.com for further information.

• The Committee on Foreign Investment in the United States (CFIUS) reviewed the Foster Miller Inc and Westar Aerospace & Defense Group acquisitions pursuant to the Exon-Florio Act along with the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("the HSR Act") and all conditions have been satisfied.
• The CFIUS is a multi-agency executive committee chaired by the US Treasury and incorporates the Departments of Defense, Homeland Security and State. The Exon Florio Act authorises the President to prohibit foreign investments in US companies when there is credible evidence that it will result in foreign control of the US business and the foreign interest exercising the control "might take action that threatens to impair the national security."
• The HSR Act covers antitrust (competition law) approvals for companies seeking to acquire or merge with US companies and requires filings to be made with the Federal Trade Commission at least 30 days prior to consummation of any such transaction. Upon successful completion of these requirements, no other governmental or regulatory clearances will remain as conditions precedent to the completion of the acquisition.