Engineering support company Babcock has agreed contracts with the Ministry of Defence to buy its Defence Support Group and associated service provision contract.
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.