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BAE Systems Announces Recommended Offer To Acquire Detica Group Plc


London, United Kingdom – BAE Systems has today announced a recommended offer to acquire Detica Group plc (Detica), a provider of information management capabilities to the National Security and Resilience (NS&R) sector. The offer to acquire the entire issued share capital of Detica for 440 pence per share in cash values the business at approximately £538 million including assumed net debt.

Detica employs approximately 1,500 people. It has an enviable trading record since its incorporation in 1977 and has established itself as the pre-eminent consulting provider servicing the counter-threat agenda. Detica has also been able to leverage successfully its expertise and core capabilities into commercial markets through a keen focus on the information-intensive areas of security, fraud containment, risk management, regulatory compliance and customer management.

The proposed acquisition of Detica is consistent with BAE Systems’ strategic objective to establish security businesses in its home markets. BAE Systems has identified NS&R as an evolving and growing sector benefiting from increasing priority government attention and expects the accessible NS&R sector in the UK to double to over £3bn by 2011. While BAE Systems has been developing plans for substantial organic investment to pursue growth NS&R opportunities, the proposed acquisition of Detica provides an economically attractive and accelerated implementation of its strategy to address these growth opportunities.

Ian King, Chief Operating Officer, UK and Rest of World, BAE Systems said; “This acquisition will combine Detica’s well established customer relationships and technical capabilities together with our system integration capabilities. This will result in a depth of financial and technical capability to address growth opportunities and better serve customers. In addition, our broad geographic footprint provides substantial opportunities to grow a national security and resilience business across our other home markets and our existing activities and structure will provide a platform for us to apply Detica’s capabilities into the US Homeland Security market.”

BAE Systems has great respect for what Detica’s Chief Executive, Tom Black and his team have achieved with Detica. Tom has confirmed he intends to stay with the business to continue to develop its strategy and lead it through its next phase of growth.

The business combination is expected to benefit from strong growth, consistent with the anticipated growth in the sector, and from cost synergies including benefits from more efficient internal investment. These benefits are expected to enable the acquisition to achieve a return in excess of our cost of capital in the third full-year following completion.

The offer is subject to sufficient acceptances being received from Detica’s shareholders and is conditional upon certain regulatory clearances. The proposed transaction is expected to complete later this year.


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