Northrop Grumman is buying Orbital ATK for about $7.8 billion as activity in the defense sector heats up amid rising global tensions.
Earlier this month, United Technologies said it would pay $22.75 billion for defense contractor Rockwell Collins.
The acquisition of Orbital, which operates a research center in Ronkonkoma, would strengthen Northrop Grumman’s capabilities in military aircraft technology and missile defense. Orbital ATK makes launch vehicles and their propulsion systems; missile technology, defense electronics, precision weapons, armament systems and ammunition. It also builds up Northrop’s space operations with Orbital’s satellites and advanced aerospace structures.
The Ronkonkoma center houses a $60 million wind tunnel used in the pursuit of flight at hypersonic speeds — at least five times the speed of sound. It had 43 employees, about half of them engineers, in 2014.
“We do not expect major changes in our workforce and facility footprint related to the acquisition,” Orbital spokesman Barron Beneski said Monday in an email. He did not have a current head count for the Ronkonkoma center.
Grumman was a key company and employer on Long Island for decades. The Bethpage-based company built military aircraft and the Apollo Lunar Module here, with peak employment at about 25,000 in the 1980s. Grumman was bought by Northrop Corp. in 1994, and by 2016 employment on Long Island had fallen to about 400.
A Grumman spokesman did not respond to requests for comment about the impact of the deal on Long Island, and did not provide a current head count.
Orbital ATK shareholders will receive $134.50 per share, a 22 percent premium to the company’s Friday closing price of $110.04. The deal’s total value is approximately $9.2 billion, including debt.
Shares of Orbital ATK surged 20 percent Monday to close at $132.25.
Northrop Grumman Corp., which is based in Falls Church, Virginia, said that after the deal closes, Orbital ATK Inc., based in Dulles, Virginia, will become a separate sector within its business operations.
The boards of both companies have approved the deal, and it’s expected to close in the first half of next year.
with Newsday Staff