Serco, the company behind NorthLink Ferries and Caledonian sleeper trains, aims to help protect America against missile attacks from North Korea following a £210 million-plus US acquisition.
The diversified company announced yesterday it had snapped up Virginia-headquartered Whitney, Bradley & Brown (WBB), a leading provider of advisory, engineering and technical services to the US military, from an affiliate of Miami-based HIG Capital.
Serco said the acquisition would increase the scale, breadth and capability of its North American defence business and give it a strong platform “from which to address all major segments of the US defence services market”.
This includes immediate access to “markets that are difficult to enter organically”, including air force programme offices, the Missile Defence Agency (MDA), Space and Missile Defence Command, the office of the secretary of defence, security agencies – including the Central Intelligence Agency, or CIA – and others.
MDA is part of the US government’s defence capability, responsible for protecting America from ballistic missile attacks from nuclear weapon-armed nations including east Asian adversary North Korea.
Delighted to announce acquisition of Whitney, Bradley & Brown Inc, a leading US defence business – increasing the scale, breadth and capability of our N American defence business, credible positions with all arms of US Department of Defense @Serco_Inc https://t.co/5p89YZjEhF
— Serco Group (@SercoGroup) February 16, 2021
Serco said its latest acquisition would be funded through existing debt facilities and start boosting earnings immediately after the deal completes, which is expected in the second quarter of 2021.
WBB is expected to generate revenue of around £168m this year producing £21m in earnings before interest, taxes, depreciation, and amortisation.
Serco said its integration into the group would deliver largely property-related cost savings of about £2.9m and “significant opportunities for cross-selling services across both existing Serco and WBB customers”.
On acquisition of Whitney, Bradley & Brown Inc, Serco Group CEO @rsoames says: "It creates a powerful platform for future growth and brings us impressive new capabilities in areas such as Advanced Data Analytics, AI & Machine Learning and Precision Navigation and Timing,"
— Serco Group (@SercoGroup) February 16, 2021
Hampshire-based Serco is led by chief executive Rupert Soames, a grandson of former prime minister Sir Winston Churchill.
Mr Soames said: “Growing the scale, reach and capability of Serco in the largest defence market in the world is one of our strategic objectives, and the acquisition of WBB significantly advances that strategy.
“Following the acquisition of the naval systems business Unit of Alion in 2019, which increased the size of our US Navy business by 70%, WBB takes our North American defence revenues to around $1.1bn (£791m) and gives us credible positions in other parts of the market including air force, space force, army, the Missile Defence Agency and the office of the secretary of defence.
New capabilities
“It creates a powerful platform for future growth and brings us impressive new capabilities in areas such as advanced data analytics, AI (artificial intelligence) & machine learning, and precision navigation and timing, along with a team of renowned subject matter experts covering a wide range of disciplines that can be deployed across our business.”
Mr Soames added: “I greatly look forward to welcoming the WBB management team led by their CEO, Robert Olsen, along with 1,000 skilled WBB people to Serco and working with them and other colleagues as we build a strong global defence business.”
FTSE 250-listed Serco employs in excess of 50,000 people across more than 500 outsourced contracts worldwide.