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Tom Watson, chief executive of Serco Inc., describes to us the company’s strategy to further expand its military training capabilities and space work through the transaction.
Serco Group’s North American subsidiary has agreed to acquire a Northrop Grumman training services business in a move to push annual revenue beyond the $2 billion mark.
Northrop’s mission training and satellite ground network communications business brings to Serco Inc. new customers within the Army and Air Force, as well as space-related work.
“There is no overlap in our portfolios,” Serco Inc. CEO Tom Watson told WT on Thursday. “It doubles our Army business and nearly doubles what we do with the Air Force.
MT&S expects to record $300 million in revenue for 2025 on an 11% underlying operating profit margin, which Watson said is in-line with Serco Inc.’s margins.
Prior to this agreement, Serco Inc.’s most recent acquisition came in 2021 through its buy of Whitney, Bradley & Brown.
By adding MT&S, Serco Inc. continues its shift into higher-end services that began with the 2018 purchase of BTP Systems.
Serco Inc. gained more satellite communications and radar engineering services when it acquired BTP. In 2019, Serco Inc. bought the naval design and systems engineering business of Alion Science & Technology Corp.
The purchase of WBB further expanded Serco Inc.’s advisory, engineering and technical services.
Watson said Serco Inc. remains a services company at its core, but “isn’t just about providing bodies.”
