The two companies signed a definitive agreement this week on combining and forming Orbital ATK Inc., which will serve U.S. and international customers in the markets for space launch vehicles and propulsion systems, tactical missiles and defense electronics, satellites and space systems, armament systems and ammunition, and commercial and military aircraft structures and related components.
The companies said the transaction will be a tax-free, stock-for-stock merger-of-equals deal valued at about $5.0 billion. Alliant Techsystems, or ATK, shareholders will own approximately 53.8 percent of the equity of the combined company and Orbital shareholders will own about 46.2 percent.
The boards of directors of both companies have approved the deal, which is to be effected in a tax-free “Morris Trust” transaction structure. The transaction is expected to close at the end of the year following approval of shareholder, receipt of regulatory approvals and other customary closing conditions.
ATK said it will spin off its Sporting group to its shareholders immediately before the merger.
“This merger-of-equals combination of Orbital and ATK Aerospace and Defense brings together two of the space and defense industry’s most innovative developers and cost-efficient manufacturers who have worked closely together for over 25 years,” said David W. Thompson, Orbital’s president and chief executive officer. “By building on complementary technologies, products and know-how and highly-compatible cultures, the new Orbital ATK will deliver even more affordable space, defense and aviation systems to our existing customers and be strongly positioned to expand into adjacent areas.”
Thompson will be president and chief executive officer of Orbital ATK Inc.
“The proposed merger will generate cost and revenue synergies and create a more streamlined and competitive operator,” said Mark W. DeYoung, ATK’s chief executive officer. “We see opportunities to build on ATK’s success in aerospace and defense through a combination with Orbital’s proven track record in creating new launch vehicles, satellites and other advanced space technologies.”