The acquisitions of BTP Systems and several healthcare facilities contracts from Carillion total approx. £65m.
Companies: Carillion, Serco Group
Serco (LON: SRP) has announced two separate acquisitions this morning which total c. £65m in deals with BTP Systems and Carillion.
The Group's first RNS statement today announced it had acquired BTS Systems, a supplier of satellite communication and radar engineering services to the US defence force. The deal is said to be worth US$20m (£15m) and is expected to complete "around the end of the year".
Major customers of BTP include the Space and Naval Warfare Systems Command, the Naval Supply Systems Command, and Hill Air Force Base in Utah, USA. Revenue for 2017 is expected to be c. $20m and EBITDA approx. $3m.
Serco Group Chief Executive said:
"This acquisition adds deep expertise in satellite and radar engineering services, which complements Serco's existing defence business... BTP operates in a growing segment of the market and through its combination with Serco we will be able to target additional revenue and cost synergies."
The Group also announced this morning it had acquired several UK Health Facilities Management contracts from Carillion (LON: CLLN) worth a total of £50.1m. The contracts provide facilities management services to over 50 NHS sites throughout the UK, with total annual Revenues of approx. £90m and a weighted average remaining term of 14 years.
The deal with Carillion comes after its Management said talks were "ongoing" regarding the sale of its UK health business in last month's half-year report, which also downgraded forecasts leading to a sharp dip in the stock.
Serco has been dealing with its own woes recently, reporting disappointing FY16 results causing the stock to dive 20% back in February.
SRP has since struggled to recover from that dive 8 months ago with today's small jump to 118p on par with the Feb 22 price on the day of its share price drop. The Group does, however, trade at a PE multiple well above the industry median - 35x and 14x respectively.