-- Customers to Benefit from Broader Range of Technological
Innovation and More Affordable Systems and Products in Space, Defense
and Aviation Markets --
-- Shareholders to Benefit from Opportunities for Faster Growth and
Stronger Earnings of Combined Enterprise With Compelling Operational and
Financial Synergies --
-- Employees to Benefit from Greater Long-Term Career Opportunities
as Part of a Leading Aerospace and Defense Manufacturer --
-- 9:00 a.m. Conference Call with Financial Analysts and Investors to
be Webcast --
DULLES, Va.Apr. 29, 2014--
Orbital
Sciences Corporation (NYSE:ORB) today announced that it has entered
into a definitive agreement with Alliant Techsystems Inc. (NYSE:ATK),
which will combine Orbital and ATK s Aerospace and Defense (A&D) Groups
to create a $4.5 billion (combined calendar year 2013 annual revenue),
13,000-person space, defense and aviation systems developer and
manufacturer. The new company, to be called Orbital ATK, Inc., will
serve U.S. and international customers with leading positions in the
markets for space launch vehicles and propulsion systems, tactical
missiles and defense electronics, satellites and space systems, armament
systems and ammunition, and commercial and military aircraft structures
and related components. As part of the transaction, ATK will spin off
its Sporting Group, which focuses on commercial sporting equipment, to
its shareholders.
David W. Thompson (Photo: Business Wire)
The tax-free stock-for-stock merger-of-equals transaction, valued at
approximately $5.0 billion based on Orbital s closing stock price
yesterday, will combine Orbital s small- and medium-class satellite and
launch vehicle product lines with ATK A&D s rocket propulsion, composite
structures and space power systems to produce even more capable and
affordable space and missile defense products. At the same time, it will
enhance ATK A&D s strategic and tactical missile systems and propulsion,
precision weapons and military armament, and commercial and military
aircraft programs by leveraging Orbital s systems design, engineering
and integration capabilities to provide greater value-added to current
and future customers.
Orbital ATK will draw on a talented and experienced group of leaders
from both organizations for key governance and management positions. A
16-member Board of Directors will be led by Chairman Gen. Ronald R.
Fogleman (U.S. Air Force, ret.) and will include seven directors from
ATK s Board and nine directors from Orbital s Board.
Mr. David W. Thompson, Orbital s President and Chief Executive Officer,
will be President and Chief Executive Officer of the new company; Mr.
Blake E. Larson, President of ATK s Aerospace Group, will serve as its
Chief Operating Officer; and Mr. Garrett E. Pierce, Orbital s Chief
Financial Officer, will hold the same position in the new company. Other
key management positions will be determined prior to the transaction s
closing, with an equitable and balanced selection of senior executives
from each company expected in the new organization.
This merger-of-equals combination of Orbital and ATK Aerospace and
Defense brings together two of the space and defense industry s most
innovative developers and cost-efficient manufacturers who have worked
closely together for over 25 years. By building on complementary
technologies, products and know-how and highly-compatible cultures, the
new Orbital ATK will deliver even more affordable space, defense and
aviation systems to our existing customers and be strongly positioned to
expand into adjacent areas, said Mr. Thompson.
The proposed merger will generate cost and revenue synergies and create
a more streamlined and competitive operator, said Mr. Mark W. DeYoung,
ATK s Chief Executive Officer. We see opportunities to build on ATK s
success in Aerospace and Defense through a combination with Orbital s
proven track record in creating new launch vehicles, satellites and
other advanced space technologies. We are both focused on enhancing the
capability of existing customer systems by developing solutions that can
be more flexibly deployed to support their mission with enhanced
cost-effectiveness. We also see significant opportunities for growth as
new programs are initiated or begin to ramp up production.
Orbital ATK will employ about 13,000 people, including over 4,300
engineers and scientists and 7,400 production and operations
specialists, at engineering centers, research laboratories,
manufacturing facilities, and test and launch sites in 17 states.
Employees will benefit from expanded long-term career opportunities and
enhanced job stability by being part of a larger, more diverse and
financially stronger enterprise dedicated to technological innovation,
fast product cycles and operational efficiency. The combined company
will be headquartered at Orbital s existing Dulles, Virginia campus,
with major employee sites in Utah, Missouri, Virginia, Arizona,
Maryland, West Virginia, California and Minnesota.
Based on 2013 financial results, the new company would have combined
annual revenues of about $4.5 billion, EBITDA over $575 million and
total contract backlog more than $11 billion. Net debt of Orbital ATK at
closing is expected to be about $1.4 billion, after taking into account
combined cash balances of approximately $300 million. Annual revenue and
cost synergies of $220-300 million are expected by 2016, consisting of
$150-200 million of incremental annual revenue and $70-100 million of
annual cost reductions.
In the merger, ATK shareholders will own approximately 53.8% of the
equity of the combined company and Orbital shareholders will own
approximately 46.2%. The combination, which has been unanimously
approved by the Boards of both companies, is to be effected in a
tax-free Morris Trust transaction structure, with a spin-off of ATK s
Sporting Group to its shareholders immediately prior to the merger. The
merger is conditioned on approval by the shareholders of both companies,
the receipt of regulatory approvals, and other customary closing
conditions. The transaction is expected to close by the end of 2014.
Citigroup acted as financial advisor to Orbital while Hogan Lovells US
LLP acted as Orbital s legal advisor.
Investor and Analyst Conference Call Details
Orbital and ATK executives will conduct a conference call with financial
analysts and investors this morning, beginning at 9:00 a.m. (EDT). The
companies welcome members of the investment community to listen to the
call live. A copy of management s presentation will be available in the
investor relations section of www.orbital.com.
The call will be hosted by Mr. David Thompson, Chairman, President and
Chief Executive Officer of Orbital and Mr. Mark DeYoung, President and
Chief Executive Officer of ATK. They will be joined by Mr. Garrett
Pierce, Orbital Chief Financial Officer and Mr. Neal Cohen, ATK Chief
Financial Officer.
The call is being webcast and can be accessed via the investor relations
page at www.orbital.com.
For those who cannot participate in the live webcast, a telephone
recording of the conference call will be available. The telephone number
is 719-457-0820 and the confirmation code is 7630707. The recording will
be available for one month after the call. Institutional investors can
access the call via the password-protected event management site
StreetEvents (www.streetevents.com).
About ATK
ATK is an aerospace, defense and commercial products company with
operations in 22 states, as well as in Puerto Rico and overseas. ATK s
Aerospace Group is a market leader in solid rocket propulsion systems
for space and strategic launch vehicles, satellite structures and power
systems, and aerospace composite structures. The company s Defense
Systems Group is a market leader in precision weapons, tactical missiles
and related propulsion systems, and armament systems and ammunition
products. News and information can be found on the Internet at www.atk.com,
on Facebook at www.facebook.com/atk
or on Twitter@atk.
About Orbital
Orbital develops and manufactures small- and medium-class rockets and
space systems for commercial, military and civil government customers.
The company s primary products are satellites and launch vehicles,
including low-Earth orbit, geosynchronous-Earth orbit and planetary
spacecraft for communications, remote sensing, scientific and defense
missions; human-rated space systems for Earth-orbit, lunar and other
missions; ground- and air-launched rockets that deliver satellites into
orbit; and missile defense systems that are used as interceptor and
target vehicles. Orbital also provides satellite subsystems and
space-related technical services to government agencies and
laboratories. More information about Orbital can be found at www.orbital.com.
Follow the company on Twitter @OrbitalSciences
and on Facebook at www.facebook.com/OrbitalSciencesCorp.
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995
Certain statements in this communication regarding the proposed Morris
Trust transaction between Orbital and ATK, pursuant to which ATK s
sporting business ( Sporting ) will be distributed to ATK s stockholders
and Orbital and ATK s aerospace and defense businesses will be merged
(the Transaction ), the expected timetable for completing the
Transaction, benefits and synergies of the Transaction and the expected
tax treatment for the Transaction, future opportunities for the combined
company and products and any other statements regarding Orbital s and
ATK s future expectations, beliefs, plans, objectives, financial
conditions, assumptions or future events or performance that are not
historical facts are forward-looking statements made within the
meaning of Section 21E of the Securities Exchange Act of 1934. These
statements are often, but not always, made through the use of words or
phrases such as may, will, expect, intend, estimate,
anticipate, believe, project, or continue, and similar
expressions. All such forward-looking statements involve estimates and
assumptions that are subject to risks, uncertainties and other factors
that could cause actual results to differ materially from the results
expressed in the statements. Among the key factors that could cause
actual results to differ materially from those projected in the
forward-looking statements are the following: the parties ability to
consummate the Transaction; the conditions to the completion of the
Transaction, including the receipt of approval of both Orbital s
stockholders and ATK s stockholders; the regulatory approvals required
for the Transaction not being obtained on the terms expected or on the
anticipated schedule; the parties ability to meet expectations
regarding the timing, completion and accounting and tax treatments of
the Transaction; the possibility that the parties may be unable to
achieve expected synergies and operating efficiencies in connection with
the Transaction within the expected time-frames or at all and to
successfully integrate Orbital s operations with those of the aerospace
and defense business of ATK; the integration of Orbital s operations
with those of the aerospace and defense business of ATK being more
difficult, time-consuming or costly than expected; operating costs,
customer loss and business disruption (including, without limitation,
difficulties in maintaining relationships with employees, customers,
clients or suppliers) being greater than expected following the
Transaction; the retention of certain key employees being difficult;
Sporting s ability to operate successfully as a standalone business;
ATK s and Orbital s ability to adapt its services to changes in
technology or the marketplace; ATK s and Orbital s ability to maintain
and grow its relationship with its customers; reductions or changes in
NASA or U.S. Government military spending, timing of payments and
budgetary policies, including impacts of sequestration under the Budget
Control Act of 2011, and sourcing strategies; intense competition;
increases in costs, which the business may not be able to react to due
to the nature of U.S. Government contracts; changes in cost and revenue
estimates and/or timing of programs; the potential termination of U.S.
Government contracts and the potential inability to recover termination
costs; actual pension and other postretirement plan asset returns and
assumptions regarding future returns, discount rates, service costs,
mortality rates, and health care cost trend rates; greater risk
associated with international business, including foreign currency
exchange rates and fluctuations in those rates; other risks associated
with U.S. Government contracts that might expose Orbital or ATK to
adverse consequences; government investigations; costs of servicing
debt, including cash requirements and interest rate fluctuations;
security threats, including cybersecurity and other industrial and
physical security threats, and other disruptions; changes in domestic
and global economic conditions and unstable geopolitical conditions,
including in Russia and Ukraine; supply, availability, and costs of raw
materials and components, including commodity price fluctuations;
government laws and other rules and regulations applicable to Orbital
and ATK, such as procurement and import-export control, and federal and
state firearms and ammunition regulations; the novation of U.S.
Government contracts; performance of subcontractors; development of key
technologies and retention of a qualified workforce; fires or explosions
at any of Orbital s or ATK s facilities; environmental laws that govern
past practices and rules and regulations, noncompliance with which may
expose Orbital or ATK to adverse consequences; impacts of financial
market disruptions or volatility to customers and vendors; results of
acquisitions or other transactions, including the ability to
successfully integrate acquired businesses and realize anticipated
synergies, cost savings and other benefits, and costs incurred for
pursuits and proposed acquisitions that have not yet or may not close;
unanticipated changes in the tax provision or exposure to additional tax
liabilities; and the costs and ultimate outcome of litigation matters
and other legal proceedings. Additional information concerning these and
other factors can be found in Orbital s and ATK s filings with the
Securities and Exchange Commission (the SEC ), including Orbital s and
ATK s most recent Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K. Orbital and ATK assume no
obligation to update or revise publicly the information in this
communication, whether as a result of new information, future events or
otherwise, except as otherwise required by law. Readers are cautioned
not to place undue reliance on these forward-looking statements that
speak only as of the date hereof.
Additional Information and Where to Find It
In connection with the proposed Transaction, Orbital and ATK intend to
file relevant materials with the SEC, including an ATK registration
statement on Form S-4 that will include a joint proxy statement of
Orbital and ATK and that also constitutes a prospectus of ATK. INVESTORS
AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS WHEN THEY BECOME
AVAILABLE, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
ORBITAL, ATK AND THE PROPOSED TRANSACTION. The joint proxy
statement/prospectus and other documents relating to the proposed
Transaction (when they are available) can be obtained free of charge at
the SEC's website at www.sec.gov.
These documents (when they are available) can also be obtained free of
charge from Orbital upon written request to Orbital at investor.relations@orbital.com
or by calling Barron Beneski at 703-406-5528 or from ATK upon written
request to ATK by emailing investor.relations@atk.com
or by calling Michael Pici at 703-412-3216.
Participants in the Solicitation
This communication is not a solicitation of a proxy from any investor or
securityholder. However, Orbital and ATK and their respective directors
and executive officers may be deemed to be participants in the
solicitation of proxies in respect of the proposed Transaction under the
rules of the SEC. Information regarding Orbital s directors and
executive officers may be found in its Annual Report for the year ended
December 31, 2013 on Form 10-K filed with the SEC on February 25, 2014
and the definitive proxy statement relating to its 2014 Annual Meeting
of Stockholders filed with the SEC on March 11, 2014.
Information regarding ATK directors and executive officers may be found
in its Annual Report for the year ended March 31, 2013 on Form 10-K
filed with the SEC on May 23, 2013 and the definitive proxy statement
relating to its 2013 Annual Meeting of Stockholders filed with the SEC
on June 14, 2013. These documents can be obtained free of charge from
the sources indicated above. Additional information regarding the
interests of these participants will also be included in the joint proxy
statement/prospectus when it becomes available.
No Offer or Solicitation
This document shall not constitute an offer to sell or the solicitation
of an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under the securities laws of any
such jurisdiction. No offering of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
Note to Editors: High-resolution images of Orbital s satellite
and launch vehicle products can be found at http://www.orbital.com/Multimedia.
For broadcast quality b-roll, please visit http://www.orbital.com/newsInfo/media.
Source: Orbital Sciences Corporation
Orbital Sciences Corporation
Barron Beneski, 703-406-5528
Public
and Investor Relations
beneski.barron@orbital.com
or
Griffin
Communications
Sean Wilson, 832-864-3518
sean@griffincg.com