Serco enhances portfolio with Northrop Grumman's MT&S acquisition
Deal News | Jan 30, 2025 | FM Business Daily
Serco, a key player in providing essential government services, has announced its acquisition of Northrop Grumman's mission training and satellite ground network communications software business (MT&S) for $327 million. This acquisition enhances Serco's foothold in the US defense sector, positioning it to generate over $2 billion in revenue from North America, which will account for nearly half of the group's operating profit. With annual revenues of $300 million, MT&S is pivotal in fostering capabilities among US Army, Space Force, Air Force, Navy, and other international partners, offering advanced mission training and software solutions. Serco's CEO Mark Irwin notes the transaction supports the company’s trajectory of organic growth and acquisitions in the US market. The acquisition is expected to close in mid-2025, subject to regulatory approvals, further amplifying Serco’s strategic objectives in defense, training, and satellite communications on a global scale.
Sectors
- Defense
- Technology and Software
Geography
- United States – The acquisition involves a US-based defense business and highlights Serco’s expansion in the North American market.
- United Kingdom – As Serco is a UK-based company, its strategic international growth impacts operations in its home country.
Industry
- Defense – The article focuses on Serco's acquisition of a defense-related business from Northrop Grumman, underlining the significance of defense industry engagements.
- Technology and Software – MT&S offers sophisticated software for satellite ground networks, an essential component of both technology services and defense applications.
Financials
- $327 million – The purchase price for acquiring Northrop Grumman's MT&S business.
- $300 million – MT&S's annual revenue.
- Approximately $2 billion in revenue – Projected revenue for Serco's North American operations post-acquisition.
- $200 million in profit – Projected operating profit for Serco in North America following the acquisition.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Serco | Acquirer | Company | An international provider of essential government services, expanding its defense capabilities through strategic acquisitions. |
| Northrop Grumman | Vendor | Company | A leading global security company selling its mission training and satellite ground network communications business to Serco. |
| Mark Irwin | Chief Executive Officer of Serco Group | Person | Led the strategic acquisition to enhance Serco's growth in the US defense sector. |