According to the terms of the agreement, Babcock will exclusively provide the maintenance, repair, overhaul and storage of a range of current military vehicles and light weapons for the group.
Babcock will pay £140m for the defence group. The London-based firm estimates that the associated service provision contract will be worth around £2bn over the next ten years.
The acquisition is expected to be completed on 31 March 2015, while the service provision contract will start on 1 April 2015.
As of 8:16 on Wednesday, Babcock’s share price fell 1.51% to 1,045.0p per share.