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The big picture of QinetiQ including Avantus

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QinetiQ Group was born in 2001 from the UK equivalent of the US Defense Advanced Research Projects Agency and is still a UK defense technology company.

But the U.S. market represents QinetiQ’s biggest growth opportunity, as evidenced by the words of QinetiQ’s CEO and plans to acquire Avantus Federal for around $590 million announced on Friday.

In a conference call with investors Monday morning, QinetiQ CEO Steve Wadey said the company would “create a business in the US with very similar capabilities and risk profile to its successful UK business. ” he said.

“This coherence also provides further opportunities for global influence in support of the Trilateral (AUKUS) partnership between the governments of Australia, the United Kingdom and the United States,” Wadey told analysts.

All parties involved in the QinetiQ-Avantus transaction expect the transaction to close by the end of this year. The U.S. subsidiary doubles in size, bringing pro forma earnings to just under $600 million after adjusting for currency conversion, and the global company swells to nearly his $1.6 billion.

After the close: QinetiQ expects 62% of its revenue from the UK, 25% from the US, 6% from Australia and 7%, according to slides from Monday’s conference call.

The U.S. business sees a breakdown of pro forma revenues at 38% for Defense and Space Programs, 40% for Intelligence Aggregate and 22% for Homeland Security.

According to the presentation, QinetiQ’s five-year blueprint has global sales of about $2.8 billion, of which the U.S. business accounts for about one-third.

This is how QinetiQ, often said to be a name inspired by the ‘Q’ character in the James Bond film series, shapes itself to focus on the six core areas mentioned in the presentation. It should help present a global context about the .

  • Augmented Intelligence
  • Cyber ​​technology and operations
  • Data and software solutions
  • Digital engineering and integration
  • Intelligence analysis and operations
  • Fulfilling and sustaining the mission

Explaining to analysts how Avantus and its roughly 1,150 employees fit into it was largely the responsibility of QinetiQ US CEO Shawn Purvis.

According to Purvis, the three domains that Avantus fits into are intelligence analytics, data software and digital engineering, and it aims to help government agencies with programs related to information superiority and test evaluation.

Avantus, along with the Department of Homeland Security, has focused most of its work on defense and intelligence agencies under its current and previous names.

But with the addition of Avantus, Purvis said the business will either have 76% of its projected revenue backlog over the next three years, or provide a solid foundation that it considers more reliable.

“The combined organization will not only be working on current contracts and expanding current contracts across all three domains I mentioned, but also on greater integration, intelligence, surveillance (and) reconnaissance-type We can undertake programs that span the entire portfolio and must combine capabilities from both organizations today,” Purvis said.

Backed by private equity firm NewSpring Holdings, Avantus entered the market with its own acquisition plan. For example, it included intelligence agencies and programs that Purvis described as “at the heart of specific missions with their customers.”

That part and other aspects of Avantus’ strategy caught QinetiQ’s attention as a business focused on non-commodity types of cyber intelligence analysis and other mission operations work, Purvis said.

Her explanation of how Avantus operates today provides a glimpse into the future of QinetiQ US and is worth a full read.

“That (support) provision boils down to software development, systems development, creation of systems of systems, system integration roles, and integration of the components of the ISR mission.

“It can be hardware and systems, but the bulk of it and the power of it is transforming the collection and processing that happens on those platforms into a large platform that looks down to a complete ground station (intelligence) government. It is a direct partnership with our customers.”

Avantus founder and CEO Andy Maner will join QinetiQ US’s board of directors following the closing of the transaction.

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