Northrop to acquire rocket launcher Orbital ATK

A different logo — Northrop Grumman’s — might one day fly on boosters propelling NASA’s next giant exploration rocket, or on another launcher proposing to lift off from Kennedy Space Center.

Northrop’s proposed $9.2 billion acquisition of launch and satellite provider Orbital ATK, however, isn’t expected to have much near-term impact on the Space Coast in terms of jobs.

Orbital ATK has fewer than 50 employees in the area now, and the companies’ space-related portfolios are largely complimentary.

“We have very little overlap,” Northrop CEO Wes Bush said in a Monday morning conference call with financial analysts.

If the deal is completed in the first half of next year, Northrop will pay $134.50 per share of Orbital ATK stock, which jumped more than 20 percent Monday, and assume $1.4 billion in debt.

The companies said Orbital ATK initially would be run as an independent business segment within Northrop, with no immediate plans to change names or leadership.

Opportunities for the combined business to win next-generation missile, missile defense and cyber warfare contracts could potentially add to Northrop’s expansion in Melbourne or other parts of the state.

“Florida is very well positioned to take advantage of the consolidation opportunities that will come about as result of this merger, as Northrop Grumman positions itself to win a number of competitive new programs of record,” said Frank DiBello, president and CEO of Space Florida.

Those new program areas, he said, would include hypersonic systems, strategic missile defense, strategic missile deterrent systems, and next-generation space launch systems.

Falls Church, Virginia-based Northrop, which has about 60,000 employees globally, expects to add up to 1,900 employees in the coming years at Orlando Melbourne International Airport after being selected by the Department of Defense to develop the B-21 Long Range Strike Bomber. The contract's lifetime value could exceed $100 billion.

Northrop also is the lead contractor for NASA's James Webb Space Telescope, a nearly $9 billion successor to the Hubble Space Telescope slated to launch next year.

Dulles, Virginia-based Orbital ATK — the product of a merger three years ago between Orbital Sciences Corp. and ATK — has about 13,000 employees. The company launches Antares, Minotaur and Pegasus rockets, and its Cygnus spacecraft hauls cargo to the International Space Station after launches from Virginia or Florida.

Orbital is designing a new rocket that it hopes will compete with SpaceX and United Launch Alliance for military satellite launches, and potentially commercial missions. The so-called "Next Generation Launch System" would be stacked inside KSC’s Vehicle Assembly Building and share the same pad, 39B, as NASA’s Space Launch System rocket.

Orbital will provide a pair of five-segment solid rocket boosters for each SLS mission, slightly longer versions of the SRBs that helped lift space shuttles for 30 years.

Lynda Weatherman, president and CEO of the Economic Development Commission of Florida’s Space Coast, said the proposed acquisition was exciting.

"This move positions the Space Coast to broaden its capabilities, such as deep-space exploration involving the Space Launch System," she said. "It will also reinforce Brevard County’s strong presence in the space launch business, by strengthening the Kennedy Space Center with future missions."

Pete Skibitski, an equity analyst at Drexel Hamilton in Atlanta, said in a note to investors that Northrop's acquisition was both "a bold move" and "a bit hard to understand," apparently more about strategy than near-term financial benefits.

He said Orbital ATK's space portfolio would "broaden and deepen" Northrop's, but its missile and missile defense capabilities were "the most intriguing aspect of this combination."

Bush said the combined companies could provide better solutions to address growing defense threats such as North Korea's nuclear program, and space being seen as a more hostile environment.

Together, he said, they would help "the U.S. and our allies ensure our technological superiority well into the future."

Contact Dean at 321-242-3668 or jdean@floridatoday.com. And follow on Twitter at @flatoday_jdean and on Facebook at facebook.com/jamesdeanspace.