Boston, MA 04/30/2014 (wallstreetpr) – The $4.7 billion provider of defense and aerospace solutions Alliant Techsystems Inc. (NYSE:ATK) will split into two companies and one of the emerging companies will enter a merger with a strategic partner.
The company announced Tuesday its board unanimously approved the plans to create two publicly traded companies from the current organization. One of the resulting companies will have operations in the aerospace and defense industry while the other will operate in the outdoor sports industry. The aerospace and defense entity will thereafter enter a merger.
The decision to spinoff the company and enter a merger is expected to create greater value for the shareholders while positioning the company for more growth.
Following the spinoff, the aerospace and defense unit will merge with Orbital Sciences Corp to create Orbital ATK Inc that will be owned at 53.8 percent by the current ATK shareholders and 46.2 percent by the existing shareholders of Orbital. The new defense and aerospace entity will expand into more markets while providing affordable defense and space systems to the existing customers. Moreover, the resulting company will enjoy significantly improved customer base and technologies.
Alliant Techsystems Inc. (NYSE:ATK) is already a leader in the provision of defense electronics, ammunition, rocket propulsion systems and tactical rocket motors. Therefore, the spinoff and the subsequent merge will serve to boost the performance of an already good business.
New leadership
Orbital CEO David Thompson will serve as the CEO and president of Orbital ATK Inc. The new company will be headquartered in Dulles, Virginia and is projected to have operations in 17 states with about 13,000 in workforce.
The sporting group
Alliant Techsystems Inc. (NYSE:ATK) did not immediately provide a name for its standalone sports entity. However, the new company will provide some of the already well-known brands. The sporting group company that is expected to expand distribution and facilitate more opportunities for growth will be headquartered in Utah and will be lead by ATK CEO Mark DeYoung.
If regulatory hitches do not arise, the announced transactions are expected to finalize by end of 2014. Therefore, the companies will continue their separate operations until the deal is closed.
