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SALT LAKE CITY — Defense contracting giant Northrop Grumman announced Monday its plans to buy aerospace company Orbital ATK in a deal valued at $9.2 billion.
Orbital ATK has a significant Utah presence, including manufacturing and testing facilities in Clearfield, Magna and Promontory. The company employs almost 3,000 in the state with a payroll approaching $250 million doing work that includes development and testing of propulsion systems for rockets and missiles, and manufacturing advanced composite components for both commercial and military aircraft.
“The acquisition of Orbital ATK is an exciting strategic step as we continue to invest for profitable growth," said Wes Bush, chairman, CEO and president of Northrop Grumman. "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.
"We look forward to welcoming Orbital ATK’s talented employees to Northrop Grumman, and believe our combined strength will benefit our customers and shareholders."
A Reuters report indicates Orbital — which has numerous government contracts including a deal with NASA valued at $3.1 billion to fly cargo to the International Space Station — makes sense as a Northrop acquisition because demand continues to increase for space delivery systems. An expected system-wide upgrade of U.S. ballistic missile systems could also be a boon for the newly combined companies.
The deal includes $7.8 billion in cash and the assumption of $1.4 billion in debt, according to a joint press release from Northrop Grumman and Orbital ATK. The transaction, which has already been approved unanimously by the boards of directors from both companies, is expected to close in the first half of 2018.
“We are very pleased to announce this agreement with Northrop Grumman," said David Thompson, president and CEO of Orbital ATK. "It reflects the tremendous value Orbital ATK has generated for our customers, shareholders and employees. 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.
"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."
A spokesman for Orbital ATK's Utah operations did not respond to a Deseret News request for comment on the announcement. Email: araymond@deseretnews.com Twitter: DNTechHive
