The United Kingdom’s Ministry of Defence has chosen a U.S. firm—the
Carlyle Group—as a strategic investment partner for its QinetiQ Group
plc, a spin-off of the former Defence Evaluation and Research Agency.
DERA—one of Europe’s largest scientific research organizations—was
the U.K.’s version of the U.S. Defense Advanced Research Projects Agency.
It pioneered the development of such technologies as liquid-crystal displays,
carbon fiber, flat-panel speakers, infra-red sensors and microwave radar.
In 2001, the MOD split DERA into two organizations, the Defence Science and
Technology Laboratory and QinetiQ, a company spokesperson, Fiona J. Lewinton,
told a symposium sponsored by the Precision Strike Association, in Laurel, Md.
DSTL remains an integral part of the MOD, but QinetiQ—pronounced “kinetic”—has
been spun off as a company that currently is wholly owned by the government,
With some 9,000 personnel and an annual income of approximately 800 million
pounds, QinetiQ includes about three quarters of the old DERA. It has a small
headquarters in London, with major facilities in Farnborough and Malvern.
Strapped for cash, however, the MOD wants to attract more private investment
to QinetiQ. In September 2002, it selected the Carlyle Group from a field of
40 companies that had expressed an interest in acquiring a stake in the firm.
Based in Washington, D.C., Carlyle is a global investment company with a portfolio
of nearly $14 billion and investors in 55 countries. Its board of directors
is packed with retired, but still-influential U.S. and U.K. political figures.
Carlyle’s chairman, for example, is former U.S. Defense Secretary Frank
C. Carlucci. Ex-Secretary of State James A. Baker III is the firm’s senior
counselor. John Major, a previous U.K. prime minister, is chairman of Carlyle
Europe, with offices in London.
“The Carlyle portfolio makes it a good match for QinetiQ’s breadth
and depth of science and technological expertise,” said QinetiQ’s
chief executive, Sir John Chisholm, in a published statement. “Not only
is Carlyle well known for its understanding of the defense world, but it has
interests that extend into the broader fields of innovative science and technology.”
At press time, the MOD and Carlyle were engaged in negotiations over terms
of the partnership. The two were reluctant to discuss the negotiations in any
detail, because they were “at a sensitive stage,” according to Daniela
Zuin, director of corporate communications for Carlyle Europe. Nevertheless,
she told National Defense, an agreement was anticipated by early January.
Initially, the MOD plans to retain a majority interest in QinetiQ, Chisholm
said. This will ensure that British taxpayers share in any early growth in the
firm’s growth, and it will protect the U.K.’s wider defense interests
over the long term, he said.
As a junior partner, Carlyle will act as agent for “a broader spectrum
of investment funds and private investors, who are the direct investors in the
business,” Chisholm explained. He also sought to ease concerns that the
United Kingdom might be surrendering control of its primary defense-related
research and development program.
“Carlyle has undertaken to select investors who are predominately U.K.
or European, so economic ownership remains overwhelmingly British,” he
said. In addition, he said, QinetiQ will continue to be run by its existing
management team and board.
Seeking a Global Market
The investment partnership will enable QinetiQ to “have greater freedom
and access to capital, allowing the company to greater exploit its technologies
and capabilities, and diversify the wealth of knowledge it has built up over
the years to the benefit of the wider U.K. economy,” said Defence Minister
Lewis Moonie. Eventually, he said, QinetiQ can become a globally recognized
brand and the world’s leading technology provider.
The MOD remains at the core of QinetiQ’s business, Chisholm said in the
firm’s 2002 annual review. In fact, he noted, the company has established
a special division, Defence Solutions, to concentrate upon military projects.
QinetiQ also is opening units for other target markets, including transportation,
space, energy, health care, financial services, telecommunications, media and
The company has established a venture fund to provide early-stage capital to
develop its technology for commercial exploitation. The fund—called QinetiQ
Ventures Limited—invests in a small number of “high-value, early-stage”
projects for an anticipated three-year period.
Recognizing that QinetiQ is a new name in the commercial market place, the
company is looking for projects that will capture the public’s attention.
One of these is an effort—sponsored jointly with the Met Office, the
U.K.’s national weather service—to send a manned, helium-filled
balloon, called QinetiQ 1, 25 miles into the atmosphere. If successful, the
two balloonists would break the world manned-altitude record, now held by the
The two also would become the first Britons to pilot a manned space mission.
At a height of 25 miles, they could not survive without spacesuits, said QinetiQ
spokesman Stephen Coke.
The plan is to launch the massive, 1,250-foot balloon—as tall as the
Empire State Building—from QinetiQ’s trimaran ship, RV Triton. With
its 6,500 scientists and engineers, QinetiQ also is providing advice, support,
training and test facilities for the pilots, Cooke said. The Met Office is supplying
weather forecasts for the launch and landing.
During 2002, however, the weather did not cooperate, forcing the balloonists
to postpone their flight until the spring of 2003 at the earliest.
QinetiQ also is cooperating with Sir Richard Branson, the flamboyant founder
of the Virgin group of businesses, to place the latest military radar technology
aboard a lighter-than-air ship and use it to locate landmines.
According to the International Committee of the Red Cross, landmines kill or
maim 26,000 people each year. During wars of the 20th century, combatants planted
an estimated 70 million landmines in battlefields in many parts of the world.
Although the fighting eventually stopped, the landmines often were never removed.
QinetiQ has developed a ground-penetrating radar system, the Ultra-Wide Band
Synthetic Aperture Radar, that can detect buried landmine casings, even plastic
ones. Now, in a project dubbed Mineseeker, it is cooperating with a Branson
subsidiary, The Lightship Group, to mount this radar in one of TLG’s A60+
From the airship, it is possible to map mined areas at a rate of about 100
square meters a second, said project director Paul Bishop. That’s two
to five times as much as an experienced mine expert, using older technology,
can map in an entire day, he said.
A Mineseeker airship was deployed recently in Kosovo for six weeks. During
that period, it surveyed 30 mine sites and produced 60 hours of videotape and
500 still photographs.
“Mineseeker has contributed to our greater understanding of the scope
of the mine and UXO (unexploded ordinance) problem in Kosovo,” said John
Flanagan, program manager for the Mine Action Coordination Center in Kosovo.
“The data collected will be used extensively during the remainder of the
Over the next two years, the Mineseeker Foundation, set up by QinetiQ and TLG,
aims to raise enough money to complete development of the system and deploy
five airships to the world’s mine hot spots.
QinetiQ has come up with simulation technology to test the control software
for the new Eurofighter aircraft now being developed for use by several European
countries, including the U.K.
The system makes testing safer, cheaper and faster, Chisholm said. Also, he
added, it can be used to monitor the testing of engine-management electronics
The Triton, mentioned above, is QinetiQ’s research vessel. With its triple
hulls, it could mark the first major change in ship design in more than 100
years, Chisholm noted. Initial computer modeling indicated that trimarans could
have considerable advantages over monohulls.
The narrower profile offers less resistance at higher speeds, reducing fuel
consumption. The three hulls make the vessel more stable and create greater
deck area, which makes helicopter landings safer and allows more flexibility
in placing equipment.
The vessel has been undergoing sea trials over the past two years in all kinds
of weather, from calm seas to severe storms. Thus far, Chisholm said, initial
findings have been “very impressive,” he said, adding that research
on the ship will continue until 2004.
Another new QinetiQ technology, Chisholm said, has been deployed to help spot
illegal immigrants trying to stow away on automobile-bearing trains running
through the Eurotunnel, which connects the European continent with the United
Kingdom. With trains passing through the tunnel every 20 minutes, he noted,
checking each vehicle is “a major challenge.”
The company’s solution, designed initially for military use, was a thermal
camera that can detect concealed weapons, as well as people. It speeds up security
procedures by scanning vehicles as they pass through a checkpoint before boarding
the train. The system has generated considerable interest among law enforcement
and border control agencies, Chisholm said.
Under subcontract to Goodrich Corporation, of Charlotte, N.C., QinetiQ has
played a significant role in development of the Reconnaissance Airborne Pod
for the Royal Air Force’s Tornado GR4 combat aircraft. Known as Raptor,
this system provides real-time tactical reconnaissance and has just achieved
initial operating capability with the RAF, according to QinetiQ spokesman Douglas
Raptor supplies high-resolution, standoff imaging capabilities that can be
used in support of tactical operations worldwide. It enables pilots to capture
images, via electro-optical sensor technology under day or night conditions,
Millard said. Pilot then can transmit the pictures back to image analysts back
on the ground, all in real time.
The 15-foot long, 3-foot diameter, self-contained pod—developed and built
at QinetiQ—is carried underneath a Tornado. A Data Link Ground Station,
another QinetiQ technology, enables the rapid downloading, manipulation, exploitation
and analysis of intelligence imagery.
To facilitate interoperability, the DLGS is fully compatible with a wide range
of standards set by the United States, NATO and the International Organization
for Standardization, and it maximizes use of commercial, off-the-shelf hardware
and software to keep costs down.
In September, the company won a contract with the MOD to analyze the performance
and assess the overall suitability of hybrid electric-drive systems for military
vehicles. The contract calls for QinetiQ to act as systems integrator for the
design and construction of a six-wheel, 18-ton technology demonstrator, with
individual wheel control. QinetiQ will evaluate the vehicle’s performance
under realistic military conditions.
The demonstrator vehicle will include wheel-mounted electric drives, a battery-energy
storage system, diesel power generators and digital driver displays. It will
be controlled by a QinetiQ vehicle-management system, direct the drive to individual
wheels and manage the power supply for optimum performance and efficiency.
Many in the United Kingdom are waiting to see what impact the involvement of
Carlyle—with its emphasis on the profit margin—will have on the
QinetiQ research program over the long run.
QinetiQ’s maneuvers also are being closely watched in the United States,
where the Defense Department is considering consolidation of its more than 100
military research laboratories as part of the next round of base realignments
and closings, which is scheduled to begin in 2005.