Aerospace manufacturer Orbital ATK, known famously in Utah for spectacular rocket motor tests at its facility near Promontory, has completed its purchase by Northrup Grumman. The deal, first announced last fall, has a price tag of $9.2 billion.
Both companies have significant operations in Utah. Orbital ATK has eight facilities in the state, with manufacturing and testing units in Clearfield, Magna and Promontory. ATK employs about 3,000 Utahns with a local payroll of nearly $250 million. Its operations consist of development and testing of propulsion systems for rockets and missiles and manufacturing advanced composite components for both commercial and military aircraft.
{mprestriction ids="1,3"}Northrop Grumman has four offices where the company conducts military defense work, primarily the fabrication of high-tech equipment for long-range strike bombers employing about 1,100 in the state.
The acquisition by Northrup Grumman includes $1.4 billion in debt transfer in the sale price, a release from Northrup Grumman said. The deal was finalized following the resolution of antitrust considerations and was formally approved by the U.S Federal Trade Commission earlier this month.
A number of conditions have been stipulated as part of the deal to ensure that competition in supplying rockets to the U.S Defense Department still remains. “By ensuring that other missile suppliers can continue to compete, the settlement preserves the pro-competitive benefits of the transaction while addressing the potential anticompetitive harms,” a statement by the FTC said.
One such condition enforced by the FTC is that Northrop Grumman must make Orbital ATK-developed solid rocket motors available to other defense and aerospace contractors “on a non-discriminatory basis under specified circumstances,” the FTC said.
Although Norman Grumman has a long history in producing spacecraft, before its purchase of Orbital ATK, the company was not seen as a leading player in the launch industry. The acquisition is seen as a “complementary fit” and not one that will reduce competition in the defense and space sectors, according to Northrop Grumman CEO Wes Bush.
“Northrop tends to focus on the larger systems that have a set of mission applications that is attendant with that class of platform, whereas Orbital ATK has demonstrated a very significant capability in the small and medium size, and, I would say, more agile class of spacecraft,” said Bush.
Orbital ATK will now be named Northrop Grumman Innovation Systems and will become Northrop Grumman’s fourth business sector along with its Aerospace Systems, Mission Systems and Technology Services. The new sector will be headed by Blake Larson, who previously served as the chief operating officer of Orbital ATK.
“We are delighted to have them join the Northrop Grumman team and we are very excited about the value creation our combination represents for our customers, shareholders and employees. Together, through our leading technologies and innovation-focused culture, we look forward to developing enhanced mission capabilities and more competitive offerings in critical global security domains,” said Bush.{/mprestriction}
