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DSG SALE UPDATE

DSG SALE UPDATE
By Kate Carr, DSG Sale Team.

In the latest edition of Digest, the DSG Publication, Kate Carr from MOD’s DSG Sale team gives us an update on the sale.

It has been a very busy couple of months for the DSG sale team, with a number of public events and announcements, and the pace of work continues to increase as we prepare DSG for sale. At the beginning of June, Archie Hughes, DSG Chief Executive wrote to all employees about the scope of the sale, and the assumption that is currently being tested that only a Land-focussed business should be taken to the market. So what does this mean for the DSG staff employed in the Electronics Components Business Unit (ECBU) at Sealand and Stafford? A workshop was held at Sealand on 11 July, attended by the DSG sale team, the Air Customers, and senior DSG management. This included a tour of the facilities to see the work going on there, from maintenance of Tornado radars to new business, such as the work with Defence Science and Technology Laboratory on electronic counter measures and fibre optic repairs for Typhoon. The day reinforced the RAF’s opinion that ECBU still provides essential services, sometimes in sensitive areas, and we need to ensure that this support is maintained for as long as the customer requires it. How that would be achieved if ECBU wasn’t part of the sale is now the subject of further work. That work, including testing the assumption with the market that ECBU would be out of scope, will conclude in the overall business case for the DSG sale in the autumn, when Ministers will make a decision, and until then exclusion from the sale is still only an option. Of course, the Trades Unions will be consulted before a decision on whether or not to proceed with sale is presented to Ministers.

The sale of DSG also featured at the Army and Defence, Equipment and Support’s DVD event at Millbrook Proving Ground. The theme of DVD this year was ‘Transforming support for the land equipment to deliver Army 2020’. Major General Paul Jaques CBE, Director General Land Equipment Support, presented the Army’s vision for the future sold DSG. He confirmed that the Army were absolutely interested in the future outcome of DSG and that DSG is the key enabler to deliver the Army’s equipment outputs in support of training and operations. In front of industry and DSG’s senior management, the General was very complimentary about DSG’s achievements over the past few years. The presentation described his insistence on continuing that the current level of close working, delivering an agile, long-term partner that could help the Army deliver fundamental transformation in the way it supports its equipment. His key message, though, was that whilst the services that DSG provides now are vital and need to be maintained, he wants a buyer of DSG to invest in DSG, enhance its capabilities, make it even better than it is now, and to expand into new roles. The briefing was very well attended by industry and confirmed that there is definite interest in DSG.

Following on from DVD, we have now started an exercise to engage further with the market. This is in advance of formally launching the Sale Process, and our financial advisers, Lazard, are meeting with a broad cross-section of industry to gather the views of potential purchasers on how DSG should be presented to the market. The feedback from industry will be very important. It will inform our thinking on some of the key factors of the process, for example how we describe the front line’s requirement, how we write the contract for DSG’s services, and how we structure the sale itself. We also recently launched our formal engagement with industry on Intellectual Property. This is a key part of our sale strategy to ensure that a sold DSG continues to have access to the Intellectual Property it needs.

So the pace of work continues to increase, not just in the Head Office sale team but also amongst an increasing nu

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