Car and plane parts maker Meggitt plc (LON:MGGT) has sold its Target Systems division to defence outsourcer QinetiQ Group PLC (LON:QQ.) for £57.5mln in cash.
Meggitt said the disposal was in line with its “strategy to focus on businesses of scale in attractive markets where our leading positions offer greater potential for growth and operational efficiencies.”
The FTSE 250-listed group added that it has agreed to pay £10.2mln from the sale proceeds into the company's pension plan to reduce its pension deficit.
QinetiQ said the unit, which provides unmanned aerial, naval and land-based target systems to 40 different countries from bases in Britain and Canada, is expected to make £5.5mln in operating profit this year.
The group, also listed on the FTSE 250 index, said the acquisition will accelerate the growth of its international business, adding new customer relationships in Europe, Asia and North America, and will boost the company's testing and evaluation services offering.
Steve Wadey, QinetiQ's chief executive, said: “This acquisition accelerates the delivery of our strategic priorities to drive growth of our core capabilities in international markets, and to modernise and strengthen our ability to deliver world-class test and evaluation services.”