US Equity House Buys Stake in the UK Defence Research Agency
Staff at the Malvern base of QinetiQ yesterday heard they will receive a share windfall from the sale of just over a third of the defence research business to US private equity house Carlyle Group.
Carlyle is paying the Ministry of Defence pounds 140 million for a 33.8 per cent stake in the former Defence Evaluation and Research Agency, valuing the company at around pounds 500 million.
The MOD retains a 62.5 per cent stake and QinetiQ's 9,500 staff will be offered 3.7 per cent, via pounds 40 of free preference and ordinary shares and share options. The US firm also promised not to change employees pay and conditions.
The plan is to sell the MOD's remaining holding in a stock market flotation within the next three to five years, so that the ordinary shares have a monetary value.
But the MOD will retain a 'special share' in the company, allowing it to safeguard the national interest by preventing QinetiQ's research from being shared with other defence companies in which Carlyle has an interest.
The QinetiQ holding will be in a separate Carlyle Group fund which has no other defence asset, said official sources.
Even after the sale of its remaining stake, the MOD will retain the power to impose 'swingeing penalties' on QinetiQ - including compensation payments and dismissal of senior staff - if it acts against the national interest, MOD officials said. …