ATK, Orbital Sciences Postpone Merger Vote to Late January
PARIS — Oct. 28 failure of Orbital’s Antares rocket has concluded that the merger of ATK’s Aerospace and Defense group with Orbital remained a good idea.on Nov. 17 said its special due-diligence assessment of Orbital Sciences following the
Orbital and ATK jointly announced that they are nonetheless giving their shareholders additional time to evaluate the merger, and that the planned Dec. 9 votes by both companies had been rescheduled for Jan. 27.
The merger involves ATK’s spinning off of its Sporting Goods division into a new company, called Vista Outdoor. ATK’s Aerospace and Defense group would then merge with Orbital, with the combined company becoming a wholly owned ATK subsidiary.
The two companies said the transaction is expected to close in February.
Dulles, Virginia-based Orbital’s stock fell dramatically following the Antares failure, which destroyed an Orbital-built module carrying supplies to the international space station under a services contract with NASA.
But since then the stock has recovered and as of Nov. 17 was just 2 percent below where it traded on the eve of the April 28 merger announcement.
For reasons unrelated to the Antares rocket failure, ATK’s stock has also had a rocky 2014 and at the stock market’s close Nov. 17 was down 19.4 percent since the Orbital deal was announced.
Without disclosing many details, Orbital has assured investors that the company would fulfill the NASA supply contract by launching space station cargo on one or two launches provided by third parties without “material adverse financial changes in 2015 or future years,” Orbital Chief Executive David W. Thompson said in a Nov. 17 statement. Thompson will become chief executive of the newly named Orbital ATK.
Orbital has further said it would replace Antares’ Russian-built first-stage engine with an undisclosed engine to be operational starting in late 2016. Whether the new engine is Russian or American — Orbital has said it was evaluating alternatives in both nations — is unclear. Also unclear is whether Orbital is considering an ATK-built solid-fueled first stage and whether such a propulsion system would be compatible with the Antares launch site at Wallops Island, Virginia.
While Orbital officials had expressed confidence immediately after the failure that the merger plans remained intact, Arlington, Virginia-based ATK had been more circumspect, saying it wanted to evaluate the consequences in detail. The company’s Nov. 17 announcement said this has been completed with a reaffirmation of the merger’s advantages.
“We believe it was responsible and essential to conduct this special due diligence and as a result of our findings, management and our board of directors continue to endorse the previously announced transaction,” ATK Chief Executive Mark DeYoung said in a Nov. 17 statement.