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Serco subsidiary bags US Air Force training and simulator contract

ALN

Serco PLC on Tuesday said its investee MT&S had secure a US Air Force contract as sole provider of training and simulator services.

Back in May, Serco bought MT&S from Northrop Grumman Corp, a Falls Church, Virginia-based aerospace & defence firm. MT&S is a mission training and satellite ground network communications software business.

Hampshire, England-based Serco outsources government services that span defence, immigration, transport, health and other facilities management.

Serco said the award to MT&S has a ceiling value of $972 million, or £720 million, over the next five years. It is an ‘indefinite delivery, indefinite quantity’ contract, which the firm expects to generate £45 million in revenue from task orders in 2026.

The Air Force Modelling and Simulation Support Services or AFMS3 programme will see MT&S provide training systems and services at approximately 20 US Air Force locations to ‘improve warfighter skills and enhance operational readiness,’ Serco said.

Chief Executive Anthony Kirby noted: ‘This contract award reflects our growing capabilities in mission simulation, operational training and live, virtual, constructive technologies, which are key areas of strength and opportunity for Serco both in the US and internationally.’

Also on Tuesday, Serco hired Michael LaRouche as the new chief executive of its North American division, effective from October 1. Serco noted the Lockheed Martin Corp alum’s experience ‘across defence and adjacent sectors for both US and international customers’. He replaces Tom Watson, who is stepping down.

‘The US and Canadian markets represent significant growth opportunities for Serco. I look forward to Michael taking our North American business forward for the benefit of our customers, employees and shareholders at a time when the division has strong momentum,’ CEO Kirby added.

Serco shares rose 4.1% to 232.40 pence on Tuesday morning in London.

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