Serco has completed its acquisition of Northrop Grumman's mission training and satellite ground network communications software business (MT&S) as it scales its presence in North America to generate in excess of US $2 billion in annual revenue.
The acquisition received regulatory approval and was finalised at a purchase price of $327 million (245 million). Following the acquisition, Defence will be Serco's largest sector, representing 40% of Group revenue and 50% of Group underlying profit. The transaction will be mid-single digit accretive to underlying EPS in 2026, the full year of ownership.
Background to the acquisition
MT&S provides the US military with advanced mission training services, and software that makes satellite ground networks more efficient, and generates annual revenues of approximately $300 million.
Nearly 1,000 highly skilled individuals will join Serco, contributing invaluable expertise in digital engineering, software development, satellite ground network communications software, training and mission simulation.
Following this acquisition, defence will be our largest sector, representing approximately 40 per cent of Group revenue, with operations in all our major geographies.
Integrating this business expands the live and virtual training capabilities that Serco can offer its customers, allowing Serco to export MT&S' best-in-class military training and satellite ground network communications software capabilities to existing defence customers and new, international markets.
The acquisition also supports Serco's growth goals within the global space sector, where Serco continues to build its space footprint in regions such as the US, the UK, Australia, Europe and the Middle East.
Anthony Kirby, Serco's Group Chief Executive, says: "Following this acquisition, defence will be our largest sector, representing approximately 40 per cent of Group revenue, with operations in all our major geographies. North America will represent approximately 50 per cent of Group underlying operating profit.
"This acquisition, our fifth in defence since 2019, strengthens our position for future organic growth through increased scale, our breadth of solutions and builds upon the excellent new business and retentions we have secured in defence so far in 2025.
"My colleagues and I are delighted to welcome around 1,000 highly experienced, skilled employees from Northrop Grumman to our business in North America."
