|Type||Public limited company|
|Traded as||LSE: QQ.|
Research and development
|Headquarters||Farnborough, Hampshire, United Kingdom|
|Number of locations||UK, North America and Australia|
|Key people||Mark Elliott (Chairman)
Leo Quinn (CEO)
|Products||Defence, Security, Aviation and Energy and Environment|
|Revenue||£1,469.6 million (2012)|
|Operating income||£161.3 million (2012)|
|Net income||£(73.7) million (2012)|
Qinetiq (// as in kinetic; styled as QinetiQ) is a British multinational defence technology company headquartered in Farnborough, Hampshire, United Kingdom. It is the world's 52nd-largest defence contractor measured by 2011 defence revenues, and the sixth-largest based in the UK.
Qinetiq was formed from the privatised part of the former UK government agency, Defence Evaluation and Research Agency (DERA) in June 2001 (with the remainder of DERA renamed as Dstl). It has major sites in the UK at Farnborough, Hampshire, MoD Boscombe Down, Wiltshire, and Malvern, Worcestershire, each of which are former DERA sites. Since its formation it has made numerous acquisitions, primarily of United States-based companies.
- 1 Name
- 2 History
- 3 Operations
- 4 Products and services
- 5 Notable staff
- 6 See also
- 7 References
- 8 External links
In 2001, when Defence Minister Lewis Moonie announced the creation of Qinetiq, he said that it would remain a British company based in the UK. The MoD would keep a 'Special Share' in the company, and safeguards would be in place to prevent conflicts of interest. In February 2003, the U.S. private equity firm the Carlyle Group acquired a 33.8% share in the company for £42m. Prior to stock market flotation, ownership was split between the MoD (56%), Carlyle Group (31%) and staff (13%). The Carlyle Group was expected to invest for three to five years, after which a stock exchange float would take place.
In September 2004 Qinetiq acquired the U.S. defence companies Westar Corporation and Foster-Miller (maker of the Talon robot). Also in 2004, it acquired HVR Consulting Services Ltd. a leading UK based engineering consultancy. In early August 2005, the company announced it would acquire Apogen Technologies, Inc., pending regulatory approval. The Qinetiq website lists this merger as costing $288.0m (£162.7m). In September 2005, it acquired a 90% share of Verhaert Design and Development NV (VDD), the Belgian space systems integrator. In October that year, it acquired Broadreach Networks Limited, a supplier of Wi-Fi internet to the European rail industry, and in February 2006, it bought Graphics Research Corporation Ltd, developer of the Paramarine software suite of ship and submarine design tools.
Stock Exchange listing
The flotation of the company has been dogged with controversy. Ennobled in 2005, Lord Moonie, who handled the initial sale, said in 2006 that the government's 31 per cent stake in Qinetiq should not have been sold when equity markets were languishing in 2002. He said that he had argued for the sale to be delayed but was overruled by the Treasury who had convinced the Ministry of Defence to go ahead.
Qinetiq was floated on the London Stock Exchange in February 2006. The company had been valued at between £1.1bn and £1.3bn, with the MoD holding estimated to be worth £616m – £728m, the Carlyle Group's holding £341m – £403m, and staff/management's holding worth £143m – £169m. Controversy was generated by the very large returns for the Carlyle Group and senior managers, with figures of over £20m suggested in the media for Sir John Chisholm. Financial press speculation concerning a stock exchange float increased in January 2006. On 12 January 2006 an announcement was made in parliament by Dr John Reid, Secretary of State for Defence. He said that the Carlyle Group, 'will continue to retain a significant stake in the company', and that the British government would continue to hold a 'Golden Share' in Qinetiq to protect the United Kingdom's security and defence interests.
Controversy also arose around the fact that retail investors were to be excluded from the initial public offering (IPO) due to Qinetiq's complexity and the fact that institutional investors would require less complicated marketing and financing. This led to contrasts with the 'Sid' campaign for British Gas plc in 1986, where retail investors were encouraged to buy shares, both with discounts and a large advertising campaign. The issue was partially resolved by allowing some brokerage firms to place orders in the IPO as part of a combined order, allowing the firm to purchase as though an institutional investor, but on behalf of clients. While this did not result in a public campaign or retail investor discounts, it did allow many investors to purchase shares directly in the IPO. The company floated on 10 February 2006, with an IPO of 200p per share, which gave Qinetiq an initial market value of £1.3bn. On 13 February 2006 (the Monday after the Friday IPO) Qinetiq shares closed at 219.5p per share, valuing the company at over £1.4bn.
Speculation that a consortium including Qinetiq was about to win a £10bn MoD training contract helped push their share price back above 190p in early November 2006. It was announced on 17 January 2007 that the Qinetiq-led Metrix consortium was the preferred bidder for package one of the MoD's Defence Training Rationalisation programme, worth approx £16bn.
In 2007, the National Audit Office conducted an inquiry into the privatisation of Qinetiq to determine whether UK taxpayers got good value for money from the sale. The NAO inquiry looked at the following issues:
- choice of privatisation strategy;
- management of the process (the split of the Defence Evaluation and Research Agency into two, the sale to Carlyle and the flotation);
- costs incurred and the proceeds achieved; and,
- whether the deal met its objectives.
In November 2007, the NAO reported that taxpayers could have gained "tens of millions" more and was critical of the incentive scheme given to Qinetiq managers, the 10 most senior of whom gained £107.5m on a total investment of £540,000 in the company's shares. The return of 19,990% on their investment was described as "excessive" by the NAO. The role of Qinetiq's management in negotiating terms with the Carlyle Group, while the private equity company was bidding for the business, was also criticised by the NAO. Carlyle bought a third of the business for £42m which grew in value to £372m in less than four years. However, the Ministry of Defence defended the sale:
- "It has delivered excellent value for money, generating more than £800m for the taxpayer, while protecting UK defence and security interests," said Baroness Taylor, Minister for Defence Equipment and Support.
In January 2007, the Company bought Analex, a U.S. corporation providing high technology professional services and solutions, principally to the United States Government and its agencies. Analex originally incorporated in 1964 under the name Biorad, Inc which then evolved into Hadron, Inc., a U.S. government systems consulting firm.
On 9 February 2007, the Carlyle Group sold its remaining 10.3% stake at a price of 205p per share, giving it an overall £290m return on its original investment.
In February 2007 the acquisition of ITS Corporation, a provider of IT services to the US government and its agencies, was announced. The disposal of Aerospace Filtration Systems (formerly part of Westar) was announced at the same time. In June, Qinetiq Group plc announced that its U.S. subsidiary Apogen Technologies Inc. had completed the acquisition of 3H Technology LLC, a specialist IT company with US government and commercial clients. In October, the company completed the acquisition of Boldon James Holdings Limited, a UK-based provider of software solutions for high end secure messaging, primarily for military, government and security customers worldwide.
The MoD sold its remaining 18.9% holding in Qinetiq in September 2008 at 206p per share, raising £254m. The government retained its 'special share' in the company, giving it control over any potential takeover.
It was reported that between 2007 and 2010, QinetiQ’s North American business was the subject of a cyber-attack. At the time of the incidents, the company said it disclosed all of its breaches to the responsible government agencies and these were resolved to their satisfaction. Cyber security continues to be an issue with a recent Pentagon report saying that Government agencies had been victims of attacks.
Qinetiq is an international defence and security technology company that provides technology-based products and services to government and commercial customers. More than 2,000 of Qinetiq subsidiary Foster-Miller's Talon robots have been deployed to Iraq and Afghanistan most of which are being used to remotely locate and disable roadside bombs. Qinetiq's SPO stand-off threat detection system has been sold to the US Transportation Security Administration for use at American railway stations and airports. Qinetiq's Zephyr, solar powered unmanned aerial vehicle recently flew non-stop for fourteen days – an official world record for longest duration unmanned flight.
Qinetiq has a 25-year agreement with the UK Ministry of Defence (MoD) to provide test and evaluation services and manage military ranges. This agreement is the Long Term Partnering Agreement (LTPA). It is a major stakeholder in the UK Defence Technology Centre which places military research contracts on behalf of the MoD.
Also, Qinetiq has a 15-year agreement with the MoD under the Maritime Strategic Facilities Agreement (MSCA) to provide strategic maritime facilities and capabilities, including hydromechanic facilities at Haslar, biomedical facilities on the UK's South Coast, and submarine structures, survivability and shock testing facilities at Rosyth.
The Qinetiq Group comprises Qinetiq EMEA (Europe, Middle East and Australasia) and Qinetiq North America. Qinetiq North America, which was set up after the takeover of Foster-Miller, is a wholly owned subsidiary of QinetiQ, but nevertheless remains independent and separated from the overall QinetiQ group by a proxy agreement with United States in order to comply with US laws that prevent sensitive technology to come under control of a foreign venture that takes over a US company.
Qinetiq is one of the top 10 largest UK employers of science and engineering graduates, recruiting around 150 a year. Between 2002 and 2006, it has appeared in the Times Top 100 Graduate Employers list. However Qinetiq has since been accused by workers' unions of exhibiting higher than average levels of stress-related depression among employees, although this is strongly denied by the company.
Products and services
- LAST Armour
- Talon Robot
- Family of Advanced Cost Estimating Tools (FACET)
- Operating and Support Cost Model (OSCAM)
- Acoustic testing
- Wind tunnel testing
Energy and environment
- Preliminary Results 2012
- QinetiQ to create new role of Group Safety Director following independent review
- "Defense News Top 100 for 2011". Defense News. Retrieved 18 July 2012.
- "Qinetiq: from cold war to hard cash". BBC News. 23 November 2007. Retrieved 19 July 2012.
- For sale to the highest bidder - Britain's secret weapons labs
- QinetiQ seals £72m bid for Westar
- QinetiQ caps $163m buy of Foster-Miller
- Defence specialists HVR snapped up
- Britain's QinetiQ to buy Apogen
- QinetiQ agrees to buy Belgian space company
- QinetiQ expands internet rail business
- QinetiQ buys software company
- £1bn flotation 'will sell taxpayers short'
- Investors cry foul over flotation
- Arrogance has sunk this flotation to new depths
- Reid defends QinetiQ's sale price
- Former minister slams handling of the deal
- A swift killing in the defence sector The Oberserver, 29 January 2006
- QinetiQ Shareholder Team Hansard, 12 January 2006
- Qinetiq IPO raises £290m FT.com, 10 February 2006
- South Wales home for defence training hub
- Inquiry by the National Audit Office
- QinetiQ deal 'cost UK taxpayers'
- Qinetiq deal 'cost UK taxpayers' BBC, 23 November 2007
- QinetiQ buys US defence firm Analex
- Dinger, Ed (2003-12-09). "Analex Corporation". International Directory of Company Histories 74. St. James Press. ISBN 978-1-55862-549-5.
- Carlyle nets almost £300m from QinetiQ sale
- QinetiQ to buy ITS Corporation for $90m
- Westar sells filtration unit to Donaldson for $39m
- Apogen buys 3H Technology
- QinetiQ buys spooks' secure messaging provider
- Omni-ID Launches Breakthrough Solution for Asset Tracking and Supply Chain Management
- Taxpayers net £254m from final QinetiQ sale
- Riley, Michael; Elgin, Ben (1 May 2013). "China Cyberspies Outwit U.S. Stealing Military Secrets". Business Week. Bloomberg News. Retrieved 2 May 2013.
- "Company Hit By Chinese Hackers Still a Trusted Fed Supplier."
- America buys anti-terrorist spotter device from QinetiQ
- Solar powered spy plane breaks flight record
- Qinetiq, MoD sign £998m support services pricing deal Interactive Investor, 1 February 2013
- QinetiQ wins £150m MoD maritime contract The Telegraph, 3 February 2008
- Foster-Miller Announces New $51.5 Million TALON Contract Security Infowatch, 8 August 2007
- QinetiQ confirms job losses in Malvern and Farnborough BBC, 18 February 2011
- "QinetiQ". The Times (London). 2006-12-21. Retrieved 2010-05-22.
- People - QinetiQ
- High stress claim at defence base BBC News
- A Cost Analysis of Reusable and Disposable Deep Target Attack Weapon Delivery Systems
- Operating and Support Cost Model (OSCAM)
- Applications of OSCAM
- Former CIA chief joins the board of QinetiQ