Northrop Grumman announced today that it plans to acquire the rocket and satellite company Orbital ATK, in a deal that would further strengthen the giant defense contractor in space and missile defense, according to the Washington Post.
Northrop said it would pay $9.2 billion for Orbital ATK, which includes pay $7.8 billion in cash and assuming $1.4 billion in debt.
Orbital ATK employs about 140 people at its Aerospace Structures facility at Yellow Creek Port in Iuka.
“The acquisition of Orbital ATK is an exciting strategic step as we continue to invest for profitable growth,” Wes Bush, Northrop’s chief executive said in a statement. “Through our combination, customers will benefit from expanded capabilities, accelerated innovation and greater competition in critical global security domains.”
Northrop is one of the Pentagon’s leading suppliers, and is developing its B-21 stealth bomber. Orbital ATK, an aerospace manufacturer based in Dulles, Virginia, 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.
According to Space News, Orbital ATK will operate as a fourth division of Northrop Grumman, alongside aerospace systems, mission systems and technology services.
“Our two companies represent a very complementary fit,” Bush said. “We have very little overlap.”
The acquisition “reflects the tremendous value that Orbital ATK has created for our customers, our shareholders and our employees,” said David Thompson, president and chief executive of Orbital ATK, on the call. The deal will allow Orbital ATK to pursue “new opportunities that require greater technical and financial resources than we currently possess.”
An Orbital ATK investor presentation released by the company also emphasized the complementary nature of the deal, according to Space News. It noted that Orbital ATK has expertise in launch vehicles, smaller satellites, propulsion systems and some military programs that Northrop Grumman lacks. Northrop, by comparison, has capabilities in other areas, including larger satellites, that Orbital ATK does not have.
The acquisition by Northrop Grumman would give Orbital ATK greater technical and financial resources to pursue larger programs, the presentation noted. That includes ongoing efforts by Orbital to develop a satellite servicing system as well as a proposed large launch vehicle.
The Post said Orbital ATK has 13,000 employees and a backlog of more than $15 billion in contracts. It was formed in 2015 after the merger of Orbital Sciences and ATK.
Last year, the Iuka plant built its 500th large composite rocket structure for United Launch Alliance launch vehicles. Since its establishment in 1998, the Large Structure Center of Excellence manufacturing plant has produced 68 Atlas V, 28 Delta II and 404 Delta IV large composite structures across 106 ULA launches.
The large composite structures produced at the Iuka manufacturing facility measure four to five meters in diameter and range from 1 to 19 meters in length. The Orbital ATK facility uses advanced hand layup, fiber placement, machining and inspection techniques for production. The 320,000-square-foot plant houses one of the largest autoclaves in the world, measuring 20 feet in diameter by 83 feet in length.