Defence Support Group sold to Babcock

A £140m contract has been agreed by the Ministry of Defence with Babcock International for the sale of the Defence Support Group (DSG).

Babcock was selected as the preferred bidder last month for the ten-year contract, which covers the maintenance, repair, overhaul and storage of current military vehicles and light weapons.

It also includes an option to extend the agreement by an additional five years and will see the company continue the services that the DSG currently provides.

UK Defence Equipment, Support and Technology Minister Philip Dunne said: "Signing this deal with Babcock will put the Defence Support Group on a sustainable long-term footing and will transform the equipment maintenance and repair support that the army relies on, both at home and overseas.

"Babcock will provide market-leading engineering and fleet management expertise to optimise vehicle availability to the army at better value for the taxpayer.

"The £140m proceeds from the sale and the significant savings over the life of the contract represent outstanding value for money for the taxpayer and will allow us to continue to focus our resources on the frontline."

In addition to the £140m that the sale will generate, the deal will transform the way that DSG vehicles are maintained.

The acquisition of DSG is scheduled to finish in March 2015, with the service provision contract beginning the following month.

Headquartered in Andover, UK, the DSG provides maintenance, repair and overhaul services for air and land equipment, mobile and in-barracks equipment support, fleet management and calibration and electronics, as well as components and logistic support.