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QinetiQ ( as in kinetic energy) is a British defence technology company headquartered in Farnborough, Hampshire. It operates primarily in the defence, security and critical national infrastructure markets and run testing and evaluation capabilities for air, land, sea and target systems.
As a private entity, QinetiQ was created in April 2001; prior to this its assets had been part of the Defence Evaluation and Research Agency (DERA), a now-defunct British government organisation. While a large portion of DERA's assets, sites, and employees were transferred to QinetiQ, other elements were incorporated into the Defence Science and Technology Laboratory (DSTL), which remains in government ownership. Some former DERA locations have thus become key sites for QinetiQ. These include Farnborough, Hampshire; MoD Boscombe Down, Wiltshire; and Malvern, Worcestershire.
In February 2006, QinetiQ was floated on the London Stock Exchange. The privatisation process was subject to an inquiry by the UK's National Audit Office, which was critical of the generous incentive scheme available to the company's management. QinetiQ has completed numerous acquisitions of defence- and technology-related companies, primarily those that are based in the United States, and is a trusted supplier to the US government. QinetiQ USA operates under a Special Security Arrangement which allows it to work independently and separately on some of the most sensitive United States defense programs despite its foreign ownership. It has also spun off some of its technologies into new companies, such as Omni-ID. It is currently a constituent of the FTSE 250 Index.
By April 2002, while QinetiQ had taken steps to operate on a commercial basis and saw third parties as its key growth area, 80% of its annual sales was reportedly being derived from the UK MoD. It was observed that QinetiQ's close relationship with the MoD gave it a competitive edge over most private-sector rivals.
Initially, QinetiQ was entirely owned by the British government; it was planned for a stock market flotation of the firm to be conducted sometime during 2002. However, this flotation was postponed; according to aerospace industry periodical Flight International, a lack of investor confidence was the principal reason for the delay.
In late 2002, the Carlyle Group, an American private equity firm, publicly declared its intention to purchase a large stake in QinetiQ. In February 2003, the Carlyle Group completed the acquisition of a 33.8% share for £42 million. Prior to QinetiQ's flotation years later, ownership of the firm was divided between the MoD (56%), Carlyle Group (31%) and staff (13%). The Carlyle Group was expected to remain invested in QinetiQ for between three and five years, after which a stock exchange float would take place.
In September 2004, QinetiQ acquired the US defence companies Westar Corporation and Foster-Miller, maker of the Talon robot. Also in 2004, it acquired HVR Consulting Services a leading UK-based engineering consultancy.
In early August 2005, the company announced it would acquire Apogen Technologies, Inc., pending regulatory approval; according to QinetiQ's website, the purchase came at a cost of $288.0m (£162.7m). In September 2005, the company acquired a 90% share of Verhaert Design and Development NV (VDD), a Belgian space systems integrator. In October that year, it acquired Broadreach Networks Limited, a supplier of Wi-Fi internet equipment to the European rail industry, and in February 2006, it bought Graphics Research Corporation Ltd, developer of the Paramarine software suite of ship and submarine design tools.
The company had been valued at between £1.1bn and £1.3bn, with the MoD holding estimated to be worth £616m – £728m, the Carlyle Group's holding £341m – £403m, and staff/management's holding worth £143m – £169m. Controversy was generated by the very large returns generated for both the Carlyle Group and senior managers at the company; reportedly Sir John Chisholm is speculated to have benefitted by over £20 million alone. Lewis Moonie, who handled the initial sale, stated in 2006 that the government's 31 per cent stake should not have been sold when equity markets were languishing in 2002. Moonie said that he had argued for the sale to be delayed, but was over-ruled by the Treasury, which had convinced the Ministry of Defence to go ahead.
Controversy also arose around the fact that retail investors were excluded from the initial public offering (IPO) due to QinetiQ's complexity and that institutional investors would require less complicated marketing and financing. This led to contrasts with the 'Sid' campaign for British Gas plc in 1986, where retail investors were encouraged to buy shares, with discounts and a large advertising campaign. The issue was partially resolved by allowing some to place orders in the IPO as part of a combined order, allowing the firm to purchase as though an institutional investor but on behalf of clients. While this did not result in a public campaign or retail investor discounts, it did allow many investors to purchase shares. Upon its floating on 10 February 2006, QinetiQ had an IPO of 200p per share, resulting in a market value of £1.3bn. On 13 February 2006, shares closed at 219.5p, valuing it at over £1.4bn.
Speculation that a consortium including QinetiQ was about to win a £10bn MoD training contract helped push their share price back above 190p in early November 2006. It was announced on 17 January 2007 that the QinetiQ-led Metrix UK was the preferred bidder for package one of the MoD's Defence Training Rationalisation programme, worth approx £16bn. South Wales home for defence training hub
In February 2007, the acquisition of ITS Corporation, a provider of IT services to the US government and its agencies, was announced. The disposal of Aerospace Filtration Systems (formerly part of Westar) was announced at the same time. In June of that year, QinetiQ announced that Apogen Technologies Inc., its US subsidiary, had completed the acquisition of 3H Technology LLC, a specialist IT company with US government and commercial clients. In October, the company completed the acquisition of Boldon James, a UK-based provider of software for high end secure messaging, primarily for military, government and security customers worldwide.
In March 2007, QinetiQ spun off a new company, Omni-ID; this entity specialises in the commercial opportunities for passive UHF radio-frequency identification (RFID) tags. Prior to the spin off, a research team at QinetiQ had been active since the 1990s to develop new and more effective RFID technologies.
On 9 February 2007, the Carlyle Group sold its remaining 10.3% stake in the group at 205p per share, resulting in a £290 million return on its original investment. During September 2008, the MoD sold its remaining 18.9% holding in QinetiQ at 206p per share, raising £254 million. The British government retained its 'special share', giving it control over any potential takeover. In February 2020, QinetiQ acquired military training specialist Newman & Spurr Consultancy Ltd for £14 million.
In November 2022, it was announced QinetiQ had completed the acquisition of the McLean-headquartered provider of cybersecurity and data analytics software to US government agencies, Avantus Federal for $590 million USD.
QinetiQ provides auditing and consultancy services on cyber security to third party businesses. In 2011, the company announced the launch of a strategic collaboration with information security firm Nexor to pool their cyber security portfolios. During 2016, QinetiQ released a whitepaper on the topic, which identified employee behaviour as a major contributing factor in the majority of security breaches. QinetiQ has partnered with mobile phone network provider Vodafone to support end-to-end internet security services.
During August 2008, QinetiQ's Airbus Zephyr, a unmanned aerial vehicle (UAV), performed a non-stop flight spanning 14 days; this was a world record for the longest duration unmanned flight. Over the following years, Qinetic performed further record-breaking flights of the UAV. During summer 2018, an improved model of the Zephyr conducted an even-longer flight, lasting nearly 26 days. The Zephyr UAV has been offered as a commercial product, the programme having been acquired by multinational aerospace company Airbus Group. QinetiQ have been involved in the further development of the Zephyr, such as the provision of LIDAR payload for the type.
QinetiQ has a 25-year T3E (Test, Trials, Training and Evaluation) agreement formerly called the Long Term partnering Agreement (LTPA) with the UK Ministry of Defence (MoD) to provide test and evaluation services and manage military ranges. It is a major stakeholder in the UK Defence Technology Centre, which places military research contracts on behalf of the MoD.
QinetiQ has a 25-year Maritime Strategic Facilities Agreement (MSCA) with the MoD to provide strategic maritime facilities and capabilities, including hydromechanic facilities at Haslar, biomedical facilities on the UK's South Coast, and submarine structures, survivability and shock testing facilities at Rosyth.
During 2005, QinetiQ was accused by Trade union officials of its employees exhibiting higher than average levels of stress-related depression, a finding that was strongly denied by the company.
On 25 March 2021, a worker was seriously injured at a QinetiQ-run Ministry of Defence facility in Pendine, Carmarthen.
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