Britain's private equity-controlled defense technology company ,QinetiQ Ltd., announced today plans to go public next month in a flotation expected to value the business at about £1 billion ($1.8 billion).
Defense secreatary John Reid announced the news was announced on the floor of the House of Commons.
Although Washington, D.C. private equity firm Carlyle Group owns 31% of the shares and controls 51% of the voting rights, it was obliged to consult the U.K. Department of Defence before making major financial decisions. These would include not only an initial public offering, but also major acquisitions such as QinetiQ's recent purchases of U.S. defense contractors. Last August, QinetiQ bought defense and security contractor Apogen Technologies Inc. for $288 million after purchasing Foster-Miller Inc. and Westar Aerospace & Defense Group Inc. in November 2004.
Credit Suisse Group, J.P. Morgan Chase & Co. and Merrill Lynch & Co. are the bookbuilders. ABN Amro Rothschild is also an independent adviser. The IPO would put about half the business in public investors' hands.
The IPO, which would be the first flotation of a government company since Tony Blair's Labour party took power in 1997, is a politically sensitive issue such as the initial privatization in 2002. Critics complained about selling control of a vital part of Britain's defense establishment to a U.S. investor. Carlyle paid just over £42 million for its stake, which now could be valued at about £300 million. —Jonathan Braude
See story from the BBC
See earlier story from The Deal
Continue reading below
