Northrop Grumman to acquire Orbital ATK for $9B

FALLS CHURCH, Va. Officials at Northrop Grumman Corp. (NYSE:NOC), a global security company in Falls Church, Virginia, intend to acquire Orbital ATK Inc. (NYSE:OA), a global provider of aerospace and defense technologies in Dulles, Virginia, for approximately $9.2 billion, including $7.8 billion in cash plus the assumption of $1.4 billion in net debt.

Through the combination of Northrop Grumman and Orbital ATK, “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," says Wes Bush, chairman, chief executive officer, and president of Northrop Grumman.

"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. We will remain focused on operational excellence and execution during and after the transition into Northrop Grumman," adds David Thompson, president and chief executive officer of Orbital ATK.

The agreement has been approved unanimously by the Boards of Directors of both companies. The transaction is expected to close in the first half of 2018 and is subject to customary closing conditions, including regulatory and Orbital ATK shareholder approval.

Upon completion of the acquisition, Northrop Grumman plans to establish Orbital ATK as a new, fourth business sector to ensure a strong focus on operating performance and a smooth transition into Northrop Grumman. On a pro forma 2017 basis, Northrop Grumman expects to have sales in the range of $29.5 to $30 billion based on current guidance. Northrop Grumman expects the transaction to be accretive to earnings per share and free cash flow per share in the first full year after the transaction closes, and to generate estimated annual pre-tax cost savings of $150 million by 2020.

Perella Weinberg Partners LP is acting as exclusive financial advisor to Northrop Grumman and Cravath, Swaine & Moore LLP is acting as legal counsel. Citigroup is acting as exclusive financial advisor to Orbital ATK and Hogan Lovells US LLP is acting as legal counsel.

Northrop Grumman is a global security company providing systems, products, and solutions in autonomous systems, cyber, C4ISR, strike, and logistics and modernization to customers worldwide.

Orbital ATK, a global provider of aerospace and defense technologies, designs, builds, and delivers space, defense, and aviation systems for customers around the world, both as a prime contractor and merchant supplier. Its main products include launch vehicles and related propulsion systems; missile products, subsystems and defense electronics; precision weapons, armament systems and ammunition; satellites and associated space components and services; and advanced aerospace structures.

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