Northrop Grumman’s proposed $7.8 billion acquisition of Orbital ATK will drive improved affordability for its customers, strengthen its competitiveness in a number of areas such as space and missile defense systems, and help spur innovation, Wes Bush, Northrop Grumman’s chairman, president, and CEO, said Monday on an investor call.
Bush said that the operating environment in space is becoming increasingly difficult and that together Northrop Grumman and Orbital ATK will bring new capabilities. He said the same will be true in areas such as missiles, missile defense, and advanced precision munitions.
Orbital ATK formed in 2015, when Orbital Sciences Corp. merged its medium-sized spacecraft and missile-systems business with Alliant Tech Systems: a manufacturer of larger missile systems and munitions.
Orbital ATK is the Pentagon’s prime contractor for maintaining the solid- and liquid-fueled rocket motors on the Minuteman 3 ICBM under a contract worth nearly $800 million when it was awarded in 2015. The company also provides solid rocket motors for the Navy’s Trident 2 submarine-launched nuclear missiles under a subcontract to Lockheed Martin.
For the Energy Department’s National Nuclear Security Administration (NNSA), Orbital ATK is part of Consolidated Nuclear Security: the management team for the Y-12 National Security Complex near Oak Ridge, Tenn.
A spokesperson for Consolidated Nuclear Security had no immediate comment on the merger Monday, or its possible effect on management and operations of Y-12.
Orbital ATK is also the prime contractor for installing NNSA-designed nuclear-detection sensors and other instruments aboard the Air Force’s Space Test Program Satellite 6. The sensors, part of the Space and Atmospheric Burst Reporting System-3 payload, were developed by the NNSA’s Office of Nonproliferation Research and Engineering. Variants of the sensors have flown aboard U.S. satellites for decades, searching for signs of nuclear explosions in space or the upper atmosphere.
Including $1.4 billion in Orbital ATK’s debt, the enterprise value of the pending acquisition is $9.2 billion. The deal is expected to close during the first half of 2018 pending approvals by regulators and Orbital ATK’s shareholders. Both company’s boards have approved the transaction.
