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Orbital Sciences, ATK to merge in $5B stock deal

Orbital Sciences Corp. and Alliant Techsystems Inc. said Tuesday that they plan to merge in a $5 billion deal, creating a new aerospace and defense company called Orbital ATK Inc. that will employ 4,000 people in Maryland and Northern Virginia.

The top executives of both companies said they spent six months discussing the all-stock deal, calling it a "merger of equals" that complement each other's business. The new company will be based at Orbital's campus in Dulles, Va., and Orbital CEO David Thompson will lead it.

Thompson and Mark DeYoung, CEO of ATK, said they don't foresee changes at major ATK operations in Maryland, including the company's defense group based in Canton and at offices focused on space and satellite business in Elkton and Beltsville. Many Marylanders also work for Orbital at NASA's Wallops Space Flight Center on Virginia's portion of the Delmarva Peninsula.

Officials said details on any layoffs have not been determined.

"When we come out of this after we close the transaction this fall, you're going to see a strong competitor," DeYoung said in an interview. "In times of uncertainty this will be a very strong company."

The merged company expects to receive about 30 percent of its revenue from commercial and international business, 35 percent from non-defense government agencies like NASA and the Department of Energy, and 35 percent from government defense agencies.

It will employ about 13,000 people across the country and expects annual revenue of $4.5 billion.

After the deal closes, ATK shareholders will own about 54 percent of the combined company, while Orbital shareholders will own about 46 percent. Shares of both companies are currently traded on the New York Stock Exchange; Orbital shares rose more than 16 percent and ATK shares rose nearly 7 percent at the close of trading Tuesday.

The boards of both companies have approved the deal, which awaits approval by shareholders of both companies and some regulatory agencies. It is expected to close by the end of the year.

sdance@baltsun.com

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Copyright © 2014, The Baltimore Sun
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