Boston, MA 04/30/2014 (wallstreetpr) – Orbital Sciences Corp (NYSE:ORB) and Alliant Techsystems Inc. (NYSE:ATK) announced a merger of equals and also issued new top leadership structure. As such, David Thompson, the chairman and CEO of Orbital, will become the president and CEO of Orbital ATK Inc, the company that will be created in the merger.
To facilitate the merger of Orbital and Alliant Techsystems, the latter will spin off its sporting business into a separate publicly traded company with headquarters in Utah. The remaining aerospace and defense unit will combine with Orbital to create an industry leader in the provision of defense and aerospace solutions.
According to Mr. Thompson, the designated CEO for the combined business, the tie-up between ATK and Orbital will be one of the best things to have happened in the industry. He observed that customers will enjoy enhanced solutions while investors will experience greater value for their investment. Moreover, he said joining the two companies that already know each other will not be like wading into unknown territories as is usually the case in most mergers.
Orbital Sciences Corp (NYSE:ORB) and ATK have longstanding relationships, and there is little product overlap. The merger comes just when Orbital is experiencing growth from its unmanned spaceships business. Shares of the company jumped most in 11 years, in yesterday’s session. The stock gained more than 75 percent in 2013, mostly supported by its success in the unmanned ships.
On the other hand, ATK has a strong position in the supply of defense and aerospace industry where it provides missiles, military ammunition and rocket propulsion systems.
The deal
Under the deal, shareholders of Orbital will receive 0.449 common stock shares of ATK for each share of Orbital common stock. Therefore, while ATK will own 53.8 percent of the stake in the combined company, Orbital Sciences Corp (NYSE:ORB) will own 46.2 percent.
Closing the deal
Orbital Sciences Corp (NYSE:ORB) and ATK will continue to operate as separate companies until the third quarter when the merger is expected to close.
