Northrop Grumman to Acquire Orbital ATK for $9.2 Billion

Northrop Grumman headquarters in Falls Church, Virginia. Photo: Northrop Grumman.

Northrop Grumman announced on Sept. 18 that it has entered into an agreement to acquire Orbital ATK for approximately $7.8 billion in cash, plus the assumption of $1.4 billion in net debt. The boards of directors of both companies unanimously approved the deal, which is expected to close in the first half of 2018 given regulatory and Orbital ATK shareholder approval.

Northrop Grumman intends to establish Orbital ATK as a new, fourth business division, and expects the segment to generate sales in the range of $29.5 to $30 billion based on current guidance.

In a statement announcing the deal, Northrop Grumman noted the strong strategic fit between the two companies and their complementary capabilities. Northrop Grumman, for example, specializes in larger satellites, aircraft, and logistics and sustainment; Orbital ATK specializes in smaller satellites, launch vehicles and propulsion systems.

“Through our combination, customers will benefit from expanded capabilities, accelerated innovation and greater competition in critical global security domains. Our complementary portfolios and technology-focused cultures will yield significant value creation through revenue synergies associated with new opportunities, cost savings, operational synergies, and enhanced growth,” said Wes Bush, chairman, Chief Executive Officer (CEO) and president of Northrop Grumman.

Northrop Grumman is currently under contract to NASA’s Goddard Space Flight Center for the design and development of the James Webb Telescope, the successor to the Hubble Space Telescope. It is also supporting Australia’s participation in the Wideband Global Satellite Communications (WGS) system.

Orbital ATK recently began assembly of its spacecraft for on-orbit satellite life extension services, called the Mission Extension Vehicle-1 (MEV 1).