VT pays £87m to take over MoD vehicle fleet business

Click to follow
The Independent Online

VT, the support services and warship builder, moved yesterday to strengthen further its non-naval business by buying the company which provides the Ministry of Defence's entire fleet of commercial vehicles.

The Portsmouth-based group is paying Aviva £87m for the four vehicle-support businesses owned by its RAC division. The businesses have 27,000 vehicles under their management.

In addition to the MoD deal, which covers 14,000 vehicles ranging from cars and coaches to construction equipment, the businesses being bought by VT also look after 3,600 vehicles for the Metropolitan Police.

The acquisition will lift VT's total order book by £1.25bn to about £3.5bn and increase the proportion of group turnover generated by support services to around 85 per cent. The four businesses made profits before interest and tax of £10.3m last year, on sales of £140m.

The deal comes as VT and BAE Systems continue to mull a joint takeover of the rival warship and support services group Babcock. The Takeover Panel has given the two companies until 18 May to decide whether to "put up or shut up". If the bid goes ahead, then BAE would acquire Babcock's Rosyth yard in Scotland and VT would take over its support services business. VT could pay for its share of the deal by selling its Portsmouth yard to BAE. VT is involved in the Type 45 warship contract and the aircraft carrier programme for the Royal Navy. It received a further boost earlier this month when it was named as preferred bidder on a £400m deal to supply Oman with three large offshore patrol vessels.

Comments