Almost a year after beginning a strategic review of its US services division, Qinetiq (QQ.) has sold the underperforming business to a private equity-backed American defence contractor. But the reaction in the City was rather muted. Despite receiving a number of bids, a sale price of $165m (£100m) plus maximum earn-out of $50m is "a bit disappointing", according to Investec Securities, which was after £170m to £220m.
There are plenty of positives, though. Most importantly, Qinetiq has got a struggling business off its books, and using the money and its already substantial cash pile to repay private placement debt early will save £12m a year in finance costs. There's a £150m share buyback (at 23p a share, it's half what Investec expected), which should underpin the share price, too.