Northrop Grumman, one of the nation’s leading defense contractors, announced this morning that it plans to acquire the Sterling-based rocket and satellite company Orbital ATK for $9.2 billion.
The deal comes two and half years after Orbital Sciences merged with Alliant Techsystems Inc. to form Orbital ATK.
“The acquisition of Orbital ATK is an exciting strategic step as we continue to invest for profitable growth,” Northrop CEO Wes Bush stated in a release. “Through our combination, customers will benefit from expanded capabilities, accelerated innovation and greater competition in critical global security domains.”
Falls Church-based Northrop Grumman said it would pay $7.8 billion in cash, while assuming $1.4 billion in debt. Orbital ATK shareholders would receive all-cash consideration of $134.50 per share, according to a release from Northrop Grumman.
The agreement was approved unanimously by the boards of directors of both companies. The transaction is expected to close in the first half of 2018 and is subject to customary closing conditions, including regulatory and Orbital ATK shareholder approval.
“The unique alignment in culture and mission offered by this transaction will allow us to maintain strong operational performance on existing programs while we pursue new opportunities that require the enhanced technical and financial resources of a larger organization,” David Thompson, president and chief executive officer of Orbital ATK, said in a release. “Our employees will also benefit from greater development and career opportunities as members of a larger, more diverse aerospace and defense enterprise. We will remain focused on operational excellence and execution during and after the transition into Northrop Grumman.”
Orbital Sciences was founded in 1982 by three friends, David W. Thompson, Bruce Ferguson and Scott Webster, who had met at Harvard Business School. The company, now called Orbital ATK, holds a contract with NASA to resupply the International Space Station. It also builds the motors for several missile systems, as well as commercial and national security satellites. Northrop Grumman is one of the Pentagon’s top supplier, and is building its B-21 Stealth Bomber.