Meggitt has sold its defense unit to UK firm QinetiQ for 57.5 million pounds ($71 million) as the aerospace and engineering group intends to focus on its larger market.
The unit, which provides unmanned aerial, naval and land-based target systems to 40 different countries from bases in Britain and Canada, is expected to make 5.5 million pounds of operating profit this year, QinetiQ announced Wednesday.
Defense technology firm QinetiQ also stated that the unit Meggitt Target Systems would help it to drive growth in international markets as it generates 90 percent of its revenues outside the UK.
The agreement is expected to increase QinetiQ’s earnings in the first year of ownership and the returns will exceed the cost of capital spent acquiring it within the first three years.
Meggitt has agreed to pay 10.2 million pounds from the sale proceeds into the company's pension plan with intention to reduce its pension deficit.