QinetiQ Group plc completed the acquisition of Avantus Federal, a U.S.-based defense and cybersecurity consulting firm, on November 23, 2022 for $590m. The deal was announced on December 21, 2022.
| Acquirer | QinetiQ Group plc (GB) |
|---|---|
| Target | Avantus Federal (US) |
| Value | $590m |
| Type | Acquisition |
| Closing date | 2022-11-23 |
| Announcement date | 2022-12-21 |
| Buy-side advisors | Citizens, Gleacher Shacklock |
| Sell-side advisors | NewSpring Holdings, BDA Partners, Guggenheim Securities, LLC |
| Legal (buy) | Baker McKenzie, Orrick |
| Legal (sell) | Blank Rome LLP, Kirkland & Ellis LLP, Latham & Watkins |
The acquisition will bolster QinetiQ's presence in the U.S. defense market and complement its existing capabilities in cybersecurity, intelligence analysis, and engineering services.
Deal Mechanics
Citizens Bank acted as financial advisor to QinetiQ on the deal, while Gleacher Shacklock provided legal counsel. NewSpring Holdings, BDA Partners, and Guggenheim Securities advised Avantus Federal, with Blank Rome LLP, Kirkland & Ellis LLP, and Latham & Watkins handling their legal matters.
The total consideration of $590m was met through a combination of cash on hand and term loans. The transaction is expected to generate significant cost synergies over time, enhancing QinetiQ's financial profile with leverage at completion set at 1.1x Net Debt to EBITDA on a full year pro forma basis.
Strategic Rationale
QinetiQ aims to solidify its position as a leading provider of defense and security solutions in the United States through this acquisition. Avantus Federal's extensive portfolio includes cybersecurity, intelligence analysis, program management support services, and IT modernization capabilities that align closely with QinetiQ's strategic initiatives.
Financial Context
The deal is part of a broader strategy by QinetiQ to leverage its expertise in technology-enabled solutions for the defense sector. Avantus Federal’s strong client relationships with key U.S. government agencies, combined with QinetiQ's international footprint and technological prowess, positions the company well for future growth opportunities.