Babcock to acquire DSG

Deal includes a 10-year contract for the maintenance, repair, overhaul and storage of current military vehicles and light weapons

Babcock International has signed a deal with the Ministry of Defence to acquire Defence Support Group (DSG) for £140 million.  

The agreement includes a 10-year contract for the maintenance, repair, overhaul and storage of current military vehicles and light weapons, with an option to extend for a further five years. 

Minister for defence equipment, support and technology Philip Dunne MP, said: "Signing this deal with Babcock will put the Defence Support Group on a sustainable long-term footing and will transform the equipment maintenance and repair support that the Army relies on both at home and overseas.

"The £140 million proceeds from the sale and the significant savings over the life of the contract represent outstanding value for money for the tax payer and will allow us to continue to focus our resources on the front line."

Babcock chief executive Peter Rogers added: “We are committed to working with our customer to ensure we are responsive to the evolving needs of the army whilst achieving improved performance levels, enhanced operational agility and greater cost efficiencies.” 

Babcock aims to complete the acquisition by 31 March 2015 and start the service provision contract on 1 April 2015. 

DSG is based in Andover, Hampshire, but also employs people in Shropshire, Dorset, North Yorkshire, Essex, Wiltshire, Gloucestershire and Stirling.

The MoD is to retain DSG's air division, the electronics and components business unit, which will become the Defence Electronics and Components Agency.