Alliant Techsystems will press ahead with Orbital merger

Alliant Techsystems Inc. directors gave the go-ahead for the merger with Virginia-based Orbital Sciences Corp. despite last month's explosion of an unmanned rocket built by Orbital.

The Antares rocket was scheduled to deliver supplies to the International Space Station, but exploded on liftoff on Oct. 28. The disaster had caused Alliant officials to say they would review whether or not to proceed with a merger that was announced back in April.

Monday night, Alliant issued a statement saying that the merger will proceed as planned and is expected to close in February pending shareholder and regulatory approvals. Shareholder meetings to vote on the merger were delayed to Jan. 27 from Dec. 9.

Alliant Chief Executive Mark DeYoung said in a statement that continuing the merger with Orbital Sciences makes long-term sense for the company, employees and shareholders.

"During the course of the last two weeks, both companies have diligently evaluated and analyzed information relating to the Antares incident and Orbital's go-forward plan," DeYoung said. "As a result of our findings, management and our board of directors continue to endorse the previously announced transaction."

Orbital Chief Executive David Thompson said in a statement that Orbital will upgrade the propulsion system of its Antares rocket, a move that is not expected to cause ­material charges in 2015. The cause of the recent explosion is still under investigation. Losses are expected to be covered by insurance.

Alliant, which was based in Eden Prairie until 2011 and still has 200 workers there, intends to spin off its $1.6 billion sporting ammunition business to existing shareholders while separately merging its defense, satellite and aerospace business with Orbital.

As investors learned Tuesday the merger is still in the works, they sent Alliant's stock up 2 percent and Orbital's up 3.4 percent.

If the merger is approved by shareholders as expected, ­Alliant shareholders will own 53.8 percent of the merged entity that will be called Orbital ATK.

The combined firm that results from the all-stock deal will have $4.5 billion in annual revenue and take on $1.7 billion of existing Alliant debt. The company expects $70 million to $100 million in cost-reduction synergies by 2016.

While Alliant is contributing more than $3.2 billion to Orbital ATK's estimated $4.5 billion in revenue, it appears that Orbital's management may still take two of the top leadership posts of the new entity that will have 13,000 workers and key locations in 17 states, including operations in Minnesota, Virginia, Maryland, West Virginia, ­Missouri, California, Arizona and Utah.

It did not appear that the accidental rocket explosion immediately altered post-merger management plans.

Dee DePass • 612-673-7725