Following the announcement of the conditional sale of QinetiQ’s US Services division on 22 April 2014 and the receipt of all required regulatory and shareholder approvals, the Group is pleased to confirm that the transaction was completed on 23 May 2014.
The initial cash consideration of US$165 million has been received. In addition there is a potential earnout of up to US$50 million to be paid in cash no earlier than 31 March 2015, based on the gross profit performance of US Services in the financial year ending 31 March 2015.
As previously announced the Group will pay £6m into its pension scheme and make early repayment of its remaining $248m private placement debt, improving the efficiency of the Group's balance sheet. Following recognition of the associated accelerated interest costs of approximately $47m, future interest expense will be reduced by approximately £12 million per year. The Group retains revolving credit facilities totalling £268m at 31 March 2014 which are undrawn. The previously announced £150m capital return to shareholders by way of an on-market share buyback will now commence.
The Board considers the Group, following the disposal of US Services, to be highly differentiated and better positioned to deliver an increase in sustainable earnings from its Organic-Plus strategy. The Directors also believe that, once complete, the net effect of the sale of US Services, share buyback and the early repayment of private placement debt will be earnings enhancing.
Notes to Editors:
A FTSE250 company, QinetiQ uses its domain knowledge to provide technical support and know-how to customers in the global aerospace, defence and security markets. QinetiQ's unique position enables it to be a trusted partner to government organisations, including defence departments, intelligence services and security agencies.
||David Bishop, QinetiQ
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||QinetiQ press office
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||Liz Morley, Maitland
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