Serco announces latest defence acquisition ahead of IDEX 2025, reinforcing international expertise in military training and space capabilities
By Editor_wr On Feb 13, 2025
Serco, the international provider of critical government services, has announced the acquisition of Northrop Grumman's Mission Training and Satellite Ground Network Communications (MT&S) software business ahead of IDEX 2025, the International Defence Exhibition in Abu Dhabi.
Adding to Serco's existing defence capabilities, the MT&S business provides the US military with advanced mission training services, and software that makes satellite ground networks more efficient.
With expertise in training services and software engineering, and a track record of innovation, it supports programmes across the US Army, Space Force, Air Force, Navy, Combatant Commands and international partners. It has annual revenues of approximately $300 million.
MT&S will add scale to Serco in North America, growing its business there to beyond $2bn of revenue and $200m of profit. MT&S will add to Serco's existing extensive defence and space expertise, bringing new capabilities to Serco's global military, defence and space customers.
The additional of MT&S will enable Serco to provide even greater support to Middle East military and defence partners across training, software services and space.
Mark Irwin, Serco Group Chief Executive said:
'We have approximately doubled revenue and more than trebled profit in Serco's North America business in recent years through a successful combination of organic growth and strategic acquisitions. MT&S provides an excellent opportunity to continue that success.
'The acquisition increases our scale, capabilities and growth potential in US defence, the largest defence market in the world, as well as providing solutions we can offer to our customers worldwide. The acquired capability delivers comprehensive, critical, technology-enabled services fully aligned to the US military's focus on enhancing warfighting standards and readiness through solutions that are both efficient and effective.
'We look forward to welcoming nearly 1,000 new colleagues from MT&S to Serco and are excited to add their knowledge and experience to our work supporting the US Department of Defense's enduring mission to provide the combat-credible military forces needed to protect the security of the nation.'
Daniel MacGregor, Chief Growth Officer for Serco in the Middle East, added:
'As we announce this milestone at IDEX 2025, we recognise the increasing importance of advanced military training and space technologies for defence forces worldwide. The insights and expertise gained through this acquisition will further strengthen our ability to support governments and defence organisations worldwide. Knowledge transfer is at the heart of Serco's approach, and we see opportunities to share our best practices and capabilities with local defence sectors, working alongside national personnel to enhance mission readiness and operational efficiency right here in the Middle East.'
MT&S will provide further opportunities for Serco to grow organically in both North America and internationally through: Increased exposure to markets: Following the acquisition defence will be its largest sector, representing approximately 40% of Group revenue and North America overall will represent approximately 50% of Group underlying operating profit.
Following the acquisition defence will be its largest sector, representing approximately 40% of Group revenue and North America overall will represent approximately 50% of Group underlying operating profit. Enhanced capabilities in large and high-growth defence sectors: MT&S helps to ensure armed forces' mission-readiness. It will advance Serco's expertise in synthetic training, exercise simulation, and satellite ground network software services. Training represents a significant proportion of defence investment and the acquisition materially strengthens Serco's position in this market, providing a strong platform for future growth.
MT&S helps to ensure armed forces' mission-readiness. It will advance Serco's expertise in synthetic training, exercise simulation, and satellite ground network software services. Training represents a significant proportion of defence investment and the acquisition materially strengthens Serco's position in this market, providing a strong platform for future growth. Increased scale and technology capabilities will benefit Serco's pipeline of potential new work: MT&S has a strong track record delivering large programmes in training, space and technology services. The ability to reference this past performance will enhance its ability to win new work in our existing pipeline. Serco also expects to be able to expand the pipeline as it explores new opportunities with its combined capabilities.
MT&S has a strong track record delivering large programmes in training, space and technology services. The ability to reference this past performance will enhance its ability to win new work in our existing pipeline. Serco also expects to be able to expand the pipeline as it explores new opportunities with its combined capabilities. Ability to export MT&S's capabilities outside of the US: Military training and satellite capability are critical services for armed forces around the world. MT&S offers best in class solutions in these areas, which have so far been primarily limited to the US. Serco sees significant applicability to its other existing markets, including the Middle East, UK, Australia and Europe.
The acquisition, subject to regulatory approvals, is expected to close in mid-2025, at a purchase price of $327 million. (£264m).
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