BAE Systems plc, a developer of defence and aerospace systems, has strengthened its operations in the UK through the acquisition of a software business.

It added to its portfolio the Government and commercial software business of Petards Group plc, an advanced surveillance systems developer, for £2.4 million. The sum was paid in cash on completion, with a further £100,000 due if certain financial targets are achieved.

The acquired business comprises a range of software products, including the Universal Video Management System (UVMS), which is used in casinos, train stations, arenas and shopping centres. The division made a gross £400,000 profit in 2006 from a £1.8 million turnover and will now trade as part of BAE’s Integrated Systems Technology operations.

Petards’ directors decided to sell the business following a change in strategy. The business will now focus its operations on a limited range of technologies and markets. The proceeds will be used to reduce group debt and will also be invested in its remaining operations.

Under the terms of the deal, Petards will continue to provide the UVMS in North America through a licensing arrangement with BAE Systems. It has retained its other security products, including the Hawk camera, which is used for licence plate recognition, and its Swift wireless cameras.

BAE’s systems are built for air, land and naval forces as well as commercial operations, such as IT and customer support services. The group has 96,000 employees around the world and reported sales of £15 billion in 2006.

Middlesex-based Petards, which has two sites in the US, made a gross £8.4 million profit from a £23.2 million turnover in the year to December 2006. The company was advised on the disposal by ICON Corporate Finance.