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August 8, 2022

QinetiQ proposes to acquire Avantus Federal for $590m

The acquisition is expected to double the size of QinetiQ’s US business and increase its revenue by 25%.

QinetiQ Group’s subsidiary QinetiQ has closed an agreement to acquire mission-focused cyber and data analytics solutions provider Avantus Federal.

The company will acquire Avantus from NewSpring Holdings for an enterprise value of $590m by end of this year after clearing regulatory approvals.

The acquisition will be financed through existing cash and new debt facilities.

Avantus caters to the needs of the US Department of Defense, Intelligence Community, Department of Homeland Security and other civilian agencies.

It is expected to strengthen QinetiQ’s capabilities in cyber, information solutions and national security.

In the year ending 30 June 2022, Avantus earned revenues of $298m and an adjusted operating profit of $32m.

QinetiQ expects the acquisition to double the size of its US business and increase revenue by 25%.

It will encourage a 10% forward revenue growth with double-digit margins. The proposed deal will also bring a $70m tax benefit to QinetiQ.

QinetiQ is also likely to see rapid growth in priority segments in support of US national security missions.

Further, the deal will help the company’s workforce improve its technical, data analysis, advisory and programme management skills.

QinetiQ Group chief executive officer Steve Wadey said: “This acquisition is an important step in the execution of QinetiQ’s five-year ambitions to expand our presence in the US, the largest security and defence market in the world.

“Avantus’ highly integrated business, core capabilities and customer relationships complement QinetiQ’s distinctive offerings, allowing us to grow the services and solutions that benefit our combined global customers as their needs evolve at an accelerating pace.” 

Wadey added: “The combination of QinetiQ and Avantus will create a leading defence and intelligence business delivering mission-led, disruptive innovation to customers across the US, the UK, Australia and other Five Eyes nations.”

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