One other key defence enterprise offered off as Babcock offloads consultancy
Another major defense business was sold when Babcock offloads consulting firms working on nuclear submarines and weapons for Royal Navy warships
Another major defense business was sold yesterday when Babcock International sold a consultancy that works on nuclear submarines and weapons for Royal Navy warships.
The defense giant is selling Frazer-Nash Consultancy worth nearly £ 300 million to the American aerospace company KBR.
The deal will raise concerns that UK industry is rapidly losing businesses and assets after the Covid crisis sparked a downturn in the aerospace sector.
Clearance: The defense giant sells Frazer-Nash Consultancy to the American aerospace company KBR for nearly £ 300 million
It comes in the midst of a wave of bids for major British defenses, with Meggitt and Ultra both being orbited by American firms. The government was encouraged to step in to block the agreements for reasons of national security.
Frazer-Nash employs 900 people and has offices in Plymouth, Bristol and Glasgow. Its sale surprised some as it sits in Babcock’s naval division, which builds warships for the Royal Navy, including new aircraft carriers and Type 31 frigates, and services the submarine fleet.
Frazer-Nash is also a lucrative consulting firm with double-digit margins. KBR will get a company that, prior to the pandemic, had an annual profit of £ 17 million on sales of £ 101 million. The sale means that Britain’s second largest arms company is pushing ahead with the turnaround plans presented two weeks ago.
Chief Executive Officer David Lockwood, who joined last year, said he was looking to raise £ 400m from the sale of various businesses that were less related to his core work. FTSE250 is a key Department of Defense contractor, tasked with maintaining the UK nuclear submarine fleet, operating the Devonport naval dock in Plymouth and training Royal Air Force pilots.
The sale of Frazer-Nash Consultancy for £ 293 million means Babcock has secured most of the money it will take to achieve his goal.
