The UK Government is to proceed with the partial privatisation of the Defence Evaluation and Research Agency (DERA) via a public private partnership. DERA will be split into two new organisations, one taking around three quarters of the existing entity, and the other the rest.
The larger component, with 9,000 staff, will be turned into a private sector company, which, the UK Ministry of Defence says, will be floated once its potential is "suitably developed", likely next year.
DERA's most "sensitive" parts, including the Chemical and Biological Defence Sector at Porton Down, will remain in the MoD. This unit, with 3,000 staff, will also continue DERA's role in providing high level overview of defence technology, acting as the "intelligent customer" element of the MoD. DERA has previously played a key role in most UK aerospace/defence procurement decisions. The MoD will retain a stake in the floated business beyond the IPO, but this will be sold off soon after.
The approved plan replaces an initial scheme proposing that only two-thirds of DERA be spun off. That scheme was dropped due to fears that the business would not be big enough to survive.
DERA has an annual turnover of around £1 billion ($1.5 billion), and the MoD has promised that £250 million from the sale will go to the defence budget.
Source: Flight International