Serco completes MT&S acquisition

Serco has completed its acquisition of Northrop Grumman's mission training and satellite ground network communications software business (MT&S), marking the company's fifth defence acquisition since 2019. The transaction was first announced back in January (covered here) and positions defence as Serco's largest sector, now representing approximately 40% of group revenue.

MT&S, which provides advanced mission training services and satellite ground network software to the US military, is projected to generate $300m in revenue and $34m in underlying operating profit for 2025. Serco will capture seven months of MT&S performance in 2025, contributing an estimated $175m in revenue and $20m in underlying operating profit, net of the $10m transaction costs.

The acquisition significantly strengthens Serco's North American presence, which will now represent some 50% of group underlying operating profit. Management expects the deal to be mid-single digit accretive to underlying EPS in 2026. However, adverse currency movements since February have impacted 2025 guidance by £90m in revenue and £7m in operating profit.

Posted by: Marc Hardwick at 08:30

Tags: acquisition   defence   training