Government service provider Serco Inc, a subsidiary of Serco Group, announced on 30 January 2025 that it has agreed to acquire Northrop Grumman’s mission training and satellite ground network communications software business (MT&S) for USD 327 million (EUR 315 million).
The business provides the US military with advanced mission training services, along with software that makes satellite ground networks more efficient. With expertise in training services and software engineering and a track record of innovation, it supports programmes across the US Army, Space Force, Air Force, Navy, combatant commands and international partners.
MT&S will build additional scale for Serco in North America, growing its business to beyond USD 2 billion of revenue and USD 200 million of profit, according to the company. MT&S also brings new capabilities and access to a broader base of customers, which will provide further opportunities for Serco to grow organically in both North America and internationally.
Commenting on the acquisition, Serco Group Chief Executive Mark Irwin said, “We have approximately doubled revenue and more than trebled profit in Serco’s North America business in recent years through a successful combination of organic growth and strategic acquisitions. MT&S provides an excellent opportunity to continue that success.
“The acquisition increases our scale, capabilities and growth potential in US defence, the largest defence market in the world, as well as providing solutions we can offer to our customers worldwide,” Irwin added. “The acquired capability delivers comprehensive, critical, technology-enabled services fully aligned to the US military’s focus on enhancing warfighting standards and readiness through solutions that are both efficient and effective.
“We look forward to welcoming nearly 1,000 new colleagues from MT&S to Serco and are excited to add their knowledge and experience to our work supporting the US Department of Defense’s enduring mission to provide the combat-credible military forces needed to protect the security of the nation.”
Following the acquisition defence will be Serco’s largest sector, representing approximately 40% of group revenue, while North America overall will represent approximately 50% of group underlying operating profit.
A Serco press release on the acquisition stated, “MT&S will benefit from being part of Serco where services are core and defence training is a strategic priority area. Under our ownership MT&S will have a lower indirect cost base, significantly enhancing its competitiveness.”
Serco additionally noted that MT&S “has a strong track record delivering large programmes in training, space and technology services for the US Department of Defense. The ability to reference this past performance will enhance our ability to win new work in our existing pipeline. We also expect to be able to expand the pipeline as we explore new opportunities with our combined capabilities.”
