Virginia-based Northrop Grumman Corp. completed its $7.8 billion purchase of aerospace and defense company Orbital ATK Inc. after receiving approval from the U.S. Department of Justice antitrust division.
Orbital ATK was created in 2015 after the merger of Alliant Techsystems Inc. — the company spun off from Honeywell, which at one time was based in Eden Prairie — and Virginia-based Orbital Sciences Corp.
For years, Alliant's defense and aerospace business was best known for making precision guided missiles, satellite parts, and for the rocket boosters that had launched NASA space-shuttle astronauts into orbit for more than 20 years.
Alliant Techsystems (ATK) moved its headquarters from Eden Prairie to Virginia in 2011. At the time, it had 2,700 employees in Minnesota, and 15,300 others in 21 other states. The company has since spun off its ammunitions business into a separate company, and while it still has operations in the Twin Cities, the footprint is much smaller than in past years.
In 2015, the remaining ATK space and missiles business merged with Orbital Sciences, creating a giant with $4.5 billion in combined revenue and pretax profits of about $585 million. As of last year, the renamed Orbital ATK had nearly $4.8 billion in revenue, $462 million in pretax profits and 14,000 employees.
Orbital ATK will become Northrop Grumman Innovation Systems and serve as its fourth business subsidiary.
Northrop, with $25 billion in revenue, initially announced the deal in September and hoped it would win approval from U.S. officials concerned about antitrust problems. That approval came last week.
Northrop officials pegged the acquisition as a potential win for both companies because together they could win more government contracts, plus increase Orbital ATK's Army and precision-guided missiles business and work to build more state-of-the-art space rockets. Orbital ATK works regularly with NASA and had contracts to service the International Space Station.
The Federal Trade Commission allowed the merger, but insisted on two stipulations: that certain missile parts be sold to competitors and that Northrop operate Orbital ATK as a separate subsidiary from the rest of the corporation.
Blake Larson, Orbital ATK's chief operating officer, has been named president of Northrop Grumman Innovation Systems. He also will become a Northrop corporate vice president and will report to Northrop President and Chief Operating Officer Kathy Warden.
"We welcome Orbital ATK's talented employees," said Northrop CEO and Chair Wes Bush in a statement. "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."
The merger should allow the security, logistics, autonomous and cyber expertise at Northrop to blend nicely with Orbital's aerospace and defense prowess. Bush said he expected the pairing to develop innovative and enhanced mission capabilities "and more competitive offerings in critical global security domains."