London: Serco Group plc, the international outsourcing and services company, has made two significant disposals in the last week.
It has sold the majority of its operations in Germany to its local management team. With effect from 29 June 2012, the operations were transferred in return for net nil cash consideration.
Serco Germany was originally established in 1961 to provide installation and support services for the German air defence radar systems. The business subsequently diversified into additional engineering and administrative support services for the defence sector as well as training services, facilities management, field installation and maintenance services, and IT consulting and related services.
Serco says it sees limited revenue growth potential or opportunity to achieve the necessary improvement in returns from these contracts. It argues that there are few synergies with the rest of the Group, though where appropriate, certain contracts have been retained, such as IT services to the European Space Agency and facilities management for State Street in Europe.
Christopher Hyman, Chief Executive of Serco Group, said, "I would like to thank our colleagues for their hard work and commitment in our German business whilst part of Serco, however, as we take Serco forward, this area of the business has become non-core to the ongoing development of the Group.
"Our withdrawal from these operations will allow Serco to focus on selecting the best future opportunities and continue to build a balanced contract portfolio in markets and geographies around the world, where we can deliver economies of scale or the transfer of our expertise to the greater benefit of customers."
Serco has also completed the sale of its Technical Services (TS) business to AMEC plc for £137milllion cash.
Serco's TS business provides consulting and project solutions primarily to the UK civil and nuclear defence markets, and has a diverse customer base covering the majority of UK nuclear sites.
The business has around 600 employees, most of whom are nuclear qualified and experienced personnel.