BAE Systems takes on software business

BAE Systems became the sole owner of a business specialising in software for the defence industry today after buying out GKN’s 50% stake for £14.5m (€21.6m).

The UK company already owns half of Aerosystems International, whose designs are used on the Eurofighter and Tornado planes, as well as ships and submarines.

Engineering group GKN is selling its 50% stake in the venture, which employs most of its 400 staff in the UK, so it can focus on its core aviation business.

Software by the Yeovil, Somerset-based business allows planes and ships to plan their routes and communicate with each other.

It was formed in 1985 as a joint venture between Westland helicopters and software services company Cap Scientific. After a series of takeovers and mergers on both sides, it later became owned by GKN – which bought out AgustaWestland – and BAE Systems, formerly British Aerospace.

In the last four years it has significantly increased the amount of work it does for the British ministry of defence, with its systems also used on Black Hawk and Apache helicopters.

BAE Systems said today that it would continue to operate as normal and become part of its customer solutions and support business.

A spokesman described the move as a “positive” step and said BAE aimed to grow the business in the future. It also has sites in York and Worcester.

Redditch-based GKN, which makes parts for the car and aerospace industries, said the proceeds from the sale would be used to reduce short-term debt.

The company is moving its focus to the core activities of its aviation business. Earlier this year it agreed to sell its 50% stake in helicopter maker AgustaWestland – also based in Yeovil – to Italian engineer Finmeccanica.

GKN described the sale of AgustaWestland as a “transforming move” that would allow it to cut debt and strengthen its automotive business and other aerospace activities.