Leonardo DRS to sell satcom business to SES

SES operates a fleet of communications satellites, including this Airbus-built SES-14. (Airbus Defence and Space)

Leonardo DRS, the US defence subsidiary of Italy's Leonardo, has agreed to sell its Global Enterprise Solutions (GES) satellite communications business to Luxembourg-based SES for USD450 million, the two companies announced on 22 March.

Leonardo DRS said the divestiture will enable it to focus on strengthening its core capabilities through organic growth and possibly acquisitions. Those core areas include sensing, electronic warfare and cyber, network computing, force protection, and electrical power and propulsion.

“While the DRS GES business has flourished, Leonardo DRS has shifted its portfolio focus, and selling it now makes the most business sense,” Leonardo DRS CEO Bill Lynn said.

Through the aquisition, SES will bolster its ability to integrate its 70 communications satellites with customer networks. It will also gain about USD250 million in annual revenue and about USD40 million of annual earnings before interest, taxes, depreciation, and amortisation (EBITDA).

GES, which serves the US government, including US Africa Command, US Indo-Pacific Command, and US Special Operations Command, will become part of SES's Government Solutions (GS) subsidiary. The transaction is expected to close in the second half of 2022 after receiving regulatory approval.

Leonardo is exploring additional transactions, including an initial public offering for DRS and a divestiture of the Defence Systems business, which makes artillery rounds, naval guns, and torpedoes. It tried selling its Automation Business Unit, which provides baggage handling systems to airports, but indicated in February that it was not satisfied with the offers it received.