Northrop Grumman is to sell its Training Services business to Serco Inc, with the $327 million disposal expected to be completed within the coming months.
“We forecast this transaction to close towards the middle of the year,” Northrop chief executive Kathy Warden said during the company’s annual results briefing on 30 January.
“We continuously evaluate the portfolio to ensure that we are investing in the businesses that are core to achieving our strategic vision,” Warden notes. “This is an important capability for our customers, and we expect the team to continue to deliver world-class training services under new leadership, allowing us to focus on our core business.”
Currently part of its defence unit, Northrop’s mission training business has an annual revenue of around $300 million, and nearly 1,000 employees.
“The acquisition will add scale to Serco in North America, growing our business beyond $2 billion of revenue,” the purchasing company says.
“The combination will enable Serco to provide more robust, secure solutions that meet the increasingly complex needs of modern defence and space operations,” it adds.
Meanwhile, Northrop has reported that its total sales in 2024 valued $41 billion. The company ended the year with a record order backlog of just over $91.5 billion: up 9% from the same point a year earlier.
Business highlights included two major orders secured during the fourth quarter: a $3.5 billion deal to supply the US Navy’s (USN’s) replacement TACAMO (Take Charge and Move Out) capability, and a second low-rate initial production (LRIP) contract for the US Air Force’s (USAF’s) B-21 Raider stealth bomber.
Serving as prime contractor, Northrop will provide the USN’s future Lockheed Martin E-130J airborne command and control fleet, which will replace its Boeing 707-based E-6B Mercury aircraft in the TACAMO role.
Warden says Northrop will provide three E-130J systems during an engineering and manufacturing development phase, with the programme also including three options for demonstration examples and an LRIP option for six more operational assets.
“We will see about $350 million in revenue [on the TACAMO deal] this year, and growing from there,” she says.
Northrop has not disclosed how many B-21 Raiders will be manufactured under the LRIP 2 order, or detailed when the in-development model will enter service.
Speaking late last year, General Thomas Bussiere, commander of the USAF’s Global Strike Command, indicated that the service could look to accelerate the type’s operational availability, and also potentially acquire more than a currently planned 100 examples.
“We would work with the air force to look at the way those units would come under contract, and obviously we are accumulating more and more performance [data] to help inform discussions with them about the right pricing,” Warden says. However, she notes: “It would be premature of me to comment on where we expect that to land.”
