WASHINGTON: Serco Inc., the U.S. subsidiary of Serco Group, has finalized its acquisition of Northrop Grumman’s Mission Training and Satellite Ground Network Communications Software (MT&S) business following regulatory approvals, the company announced Tuesday.
MT&S provides advanced mission training services and satellite ground network efficiency solutions for the U.S. military. The acquisition is expected to generate approximately $300 million in revenue and $34 million in underlying operating profit in 2025 before transaction and integration costs.
Serco anticipates seven months of MT&S’ financial performance to contribute roughly $175 million in revenue and $20 million in underlying operating profit in 2025, with integration costs projected at around $10 million. The transaction is expected to be accretive to earnings per share in 2026.
“Following this acquisition, defense will be our largest sector, representing about 40% of Group revenue, with North America contributing approximately 50% of Group underlying operating profit,” said Anthony Kirby, Serco Group’s chief executive. “This strengthens our position for future growth and builds upon our successful business wins and retentions in defense so far in 2025.”
Updated 2025 Guidance
Serco adjusted its financial outlook to incorporate MT&S’ projected performance and integration costs, as well as currency fluctuations. The company estimates a £90 million impact on revenue and a £7 million impact on underlying operating profit due to exchange rate shifts since its last guidance update in February.
A pre-close trading update is scheduled for June 26.