Meggitt Target Systems is comprised of Meggitt Defence Systems and Meggitt Holdings Canada, and provides unmanned aerial, naval and land-based target systems to around 40 countries.
Hampshire-based QinetiQ, which sealed a £1bn deal with the Ministry of Defence earlier this month, said the Meggitt acquisition will form part of its new international business unit.
QinetiQ's share price rose 4.6 per cent in morning trading to 260.1p while Meggitt's was almost flat (up 0.1 per cent) at 472.4p.
The target practice arm is expected to generate around £28m of revenue and around £5.5m of operating profit in the year to 31 December.
QinetiQ chief executive Steve Wadey said:
This acquisition accelerates the delivery of our strategic priorities to drive growth of our core capabilities in international markets, and to modernise and strengthen our ability to deliver world-class test and evaluation services.
Meggitt Target Systems is a distinctive business with a strong management team and employees in Canada and the UK who are experts in the development and delivery of unmanned target systems and services. We know the business well having worked together for the past decade and I am delighted to welcome the team to QinetiQ.
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In a statement, Meggitt said the sale is consistent with its strategy "to focus on businesses of scale in attractive markets".
Meggitt has agreed with the trustee to pay £10.2m of the sale proceeds into the Meggitt Pension Plan to reduce the deficit.
Read more: Qinetiq reports a solid first quarter result
A former Rolls-Royce executive, Tony Wood, joined Meggitt as chief operating officer at the beginning of this month. Last month, the group announced its revenues had lifted 28 per cent in the third quarter.