We are delighted to have advised QinetiQ plc on their acquisition of Meggitt Target Systems.
QinetiQ plc approached us to provide bid support, financial & tax due diligence and SPA Advisory services in relation to its acquisition of Meggitt Target Systems from Meggitt plc.
Meggitt Target Systems is a leading provider of unmanned aerial, naval and land-based target systems and services for test and evaluation and operational training and rehearsal. The business operates from two distinct operating units, one in Medicine Hat, Canada, and the other in Ashford, Kent.
We worked with QinetiQ throughout their bid process pre-exclusivity, enabling them to prepare a competitive offer based on the available information, including trading updates as they became available.
We also analysed working capital and net debt to support the EV to Equity bridge. Once QinetiQ was the preferred bidder, we undertook our detailed confirmatory financial and tax due diligence to ensure QinetiQ’s bid was still valid. SPA input was provided in conjunction with QinetiQ's legal counsel to ensure proper protection for the key risks identified and that the price mechanism clauses were appropriate. Throughout the process, we provided QinetiQ with negotiation support on price adjustments.
Our work was complicated by a number of factors:
- The business was being carved out of Meggitt Plc, therefore we had to quickly understand the services provided by the plc Group and the likely support required going forwards. We were able to advise QinetiQ on the impact of these services on the offer, the forecast model and the requirements for the transitional services agreement
- Management time was stretched between competing bidders and other stakeholders within the group. We were able to focus on the information that impacted key decisions around deal value and terms. Additionally, a key member of the finance team was taken ill whilst the due diligence was taking place. We had to work sensitively and flexibly with the finance team in order to obtain the information we needed ensuring we met the completion timeframe, whilst still allowing the team to run their business on a day to day basis
- We provided advice and support through analysis and negotiation in respect of trapped cash, working capital and the completion mechanism, all of which impacted the value of the transaction
