Kim&A

18 September 2017 By Tom Buerkle Follow @tombuerkle

The drone and B2 bomber maker is going ballistic by buying missile and satellite maker Orbital. Cost savings fall short of covering the all-cash deal’s premium. But with tensions growing over North Korea’s nuclear threat, the target’s interceptor business may be set to rocket.

This content is for Subscribers only

To access full Breakingviews.com content you must be a subscriber. Please use the following link to request a trial.

Context News

Northrop Grumman said on Sept. 18 it had agreed to acquire Orbital ATK, a maker of satellites, rockets and propulsion for missile defense interceptors, for around $7.8 billion in cash plus the assumption of $1.4 billion of net debt. The military aerospace and logistics company will pay $134.50 a share for each share of Orbital, a premium of 22 percent over the closing price on Sept. 15.

The company projected annual pre-tax cost savings of $150 million a year by 2020.

Orbital will become a fourth business division alongside Northrop’s existing aerospace systems, mission systems and technology services units.

Perella Weinberg is advising Northrop Grumman on the deal. Citigroup is advising Orbital.

Email a friend

Please complete the form below.

Required fields *

Kim&A

This content is for Subscribers only

Existing Users Log In

Email a friend

Please complete the form below.