Northrop Grumman Agrees to Buy Orbital ATK

Posted on 09/18/2017

Defense giant Northrop Grumman Corporation agreed to acquire Dulles, Virginia-based Orbital ATK, a rocket and missile manufacturer, for roughly US$ 7.8 billion in cash (not including US$ 1.4 billion in assumed debt) – US$ 9.2 enterprise value deal. The deal gives Northrop Grumman access to more products in the rocket propulsion and munitions space. Orbital ATK is in competition with Boeing Co. on a ground-based intercontinental ballistic missile defense system. Some of Orbital ATK’s customers include Boeing, NASA, Northrop Grumman, Eutelsat, Raytheon, Airbus, Rolls-Royce, Lockheed Martin, U.S. Darpa, U.S. Department of the Army, and ThalesAlenia Space.

JPMorgan Chase & Co. is providing the debt financing for the deal in the form of a senior, unsecured bridge facility.

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.

In a release, Northrop Grumman Chairman Wes Bush stated, “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.”

Orbital ATK was formed in 2015 by the merger of Orbital and Alliant Techsystems. As of September 2017, the company has a backlog of US$ 15.4 billion in revenue.

In August, United Technologies Corporation moved to acquire Rockwell Collins Inc. for US$ 23 billion.

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