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Qinetiq to Float on Stock Market After Government's 'Modest Stake' in Carlyle Deal

Strategic Insights

— 1 min read

Qinetiq, the British defence research group, is set to float on the stock market, just 16 months after the government sold a 34% stake to Carlyle, a US private equity house specializing in defence deals. The move comes after Qinetiq's value was buoyed by increased spending on security due to terrorism, making it worth up to £1 billion. Despite opposition from industrialists and MPs over Carlyle's investments in American weapons manufacturers, Qinetiq's flotation plans have been confirmed by its chief executive, Sir John Chisholm.

Key Takeaways:

  • Qinetiq will float on the stock market, 16 months after the government sold a 34% stake to Carlyle for £250 million.
  • The company's value has increased to up to £1 billion due to increased spending on security.
  • Carlyle's stake has dropped from 33.6% to 30%, while Qinetiq staff have increased their holding from 4.4% to 13%.
  • Qinetiq has signed a 25-year, £5.6 billion contract with the MoD to manage its weapons testing ranges.
  • Six investment banks, including Morgan Stanley, Goldman Sachs, and Lehman Brothers, have been invited to pitch for the mandate to advise on the flotation.
  • Qinetiq's enterprise value was £500 million when it was sold, including £225 million of debt and £125 million of ordinary equity.
  • Sir John Chisholm confirmed the flotation plans, stating that the government's residual stake in Qinetiq will require careful handling to avoid controversy.

Statistics:

  • £250 million: The amount Carlyle paid for its 34% stake in Qinetiq.
  • £1 billion: Qinetiq's estimated worth due to increased security spending.
  • 25 years: The duration of Qinetiq's contract with the MoD to manage its weapons testing ranges.
  • £5.6 billion: The value of Qinetiq's contract with the MoD.
  • 16 months: The time since Carlyle's investment in Qinetiq.
  • 13%: Qinetiq staff's current holding in the company.
  • 4.4%: Qinetiq staff's holding in the company at the time of the Carlyle deal.
  • £500 million: Qinetiq's enterprise value when it was sold.
  • 34%: The stake sold by the government to Carlyle.
  • 56%: The MoD's current stake in Qinetiq.

Sources:

  • "Qinetiq: Let the others float," The Times, December 23, 2002.
  • "Qinetiq eyes float after Carlyle deal," Financial Times, February 28, 2003.
  • "Qinetiq: Defence deal shakes up industry," The Guardian, December 20, 2002.

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