Engineering firm Reece Group’s two central defence firms are set for major investment and job creation after being acquired in a multimillion-pound deal by global defence giant, Rafael.
The region’s proud tradition of defence manufacturing has been given a huge vote of confidence after Reece Group Ltd, based in the Armstrong Works on Newcastle’s Scotswood Road, confirmed the sale of Pearson Engineering and Responsive Engineering to defence contractor, Rafael Advanced Defense Systems Ltd.
Rafael has a strong presence in international defence markets and solid links with the UK, having recently been selected by the British Army to provide the Trophy Active Protection System, a product designed to defeat anti-tank missiles and rockets, saving soldiers’ lives.
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The two Tyneside companies will continue to operate under their own brands and serve their existing markets, bolstered by Rafael’s global footprint and links to their network of over 8,000 employees and 30 subsidiaries worldwide. New owners Rafael said the deal, struck for an undisclosed amount, will lead to a “significant increase in the number of jobs in Newcastle”.
The firm’s founder, John Reece, said the transfer of ownership to Rafael promises to create significant opportunities for the North East with investment in the existing 285 strong workforce, new jobs and the talent pipeline.
It also continues the long history of defence engineering at the 350,000 sq ft Armstrong Works site, the former Vickers tank factory which has been a centre of British engineering for more than 160 years after it was founded by the industrialist and philanthropist, Lord Armstrong.
The deal means Reece Group now just fully owns Velocity, its Sunderland-based provider of road repair related services, and the company is now exploring options for the next steps in that business.
Mr Reece, director of parent company Reece Group alongside his sister and fellow director, Anne Reece, said: “The Reece family has owned Pearson Engineering for 40 years. During this time, its counter-mine and counter-IED defence equipment has helped to save lives in conflict zones around the world including Kuwait, Iraq and Afghanistan.
“With the acquisition of Responsive Engineering, the companies worked together to develop ground-breaking new products, increase sales and expand into defence manufacturing and other sectors. To accommodate this growth, we moved our home to the iconic Armstrong Works facility in Newcastle, investing £20m in transforming it into a world-class facility with the capability to support major manufacturing programmes.
“In order to take the companies to the next stage in their journey, they need a new partner and we believe they have it in Rafael. Rafael is a global player in the defence sector and shares our commitment to championing excellence and investing in people.
“Combining the skills of our teams to establish Rafael’s UK headquarters in Newcastle will cement the future of both the companies, the Armstrong Works and innovative engineering in the North East.”
Based in Israel, Rafael specialises in innovative defence systems including vehicle armour solutions and counter IED technologies.
Yoav Har Even, Rafael’s president and CEO, said: “Pearson and Responsive Engineering’s activity is supported by an outstanding legacy of excellence in innovation.
“By acquiring this company, we will be able to enhance and expand Pearson’s manufacturing capabilities in the UK, thus strengthening our UK supply chain to better support our customers, especially the UK MOD and British armed forces.
“This will lead to a significant increase in the number of jobs in Newcastle and will build strong links with academic institutions throughout the UK and specifically in the North East.”
Pearson Engineering posted strong financial results in recent years and has won a host of awards from local and national bodies, including a Queen’s Award for Enterprise in 2022.
Craig Priday, managing director, Pearson Engineering, said: “We are immensely proud of our life-saving combat engineering systems, which are used by land forces worldwide. This acquisition will not only allow us to enhance our existing product portfolio but will enable the development of innovative, class-leading products and capabilities.
“Rafael’s ambition for Pearson and Responsive brings valuable growth and stability, for our employees, our trusted supply partners in the region and the wider community in the North East. It will undoubtedly create more jobs and generate exciting career opportunities within both companies.”
