AlliantTechsystems (ATK) is
hunting for a $2.5 billion acquisition that would help the Minneapolis-based weapons and space systems company
beyond its core
solid rocket propulsion, ammunition and advanced materials businesses and give it greater access to overseas markets.
“Our focus for future acquisitions is very much international,” Dan Murphy, ATK’s chairman and chief executive said during
a media roundtable in Washington Oct. 18. “Because of the nature of what we’ve done up to date, there isn’t that much international business because the Europeans, the Russians, the Japanese, the Chinese – they do all their own space propulsion as a national asset, so we can’t really sell that except to Japan.”
ammunition business is similarly limited to domestic sales for the same reasons, Murphy said. Of the $1.3 billion worth of guns, bullets and other munitions ATK’s Ammunition Systems group sold in 2007, only about $100 million was to non-U.S. customers. ATK’s Launch Systems and Mission Systems groups, which had combined sales of $2.3 billion for 2007, likewise do the vast majority of their business with the United States government.
Murphy said ATK is “looking hard at six
potential targets,” including companies in Canada and Europe, that would establish a fourth business line for the corporation, either in international satellite sales, commercial aerospace or alternative energy. He said he is also looking for smaller acquisitions – generally under $500 million – that would fit within ATK’s three existing business lines.
ATK added the Beltsville, Md.-based small satellite maker Swales Aerospace to its Mission Systems group earlier this year and is developing a low-cost rocket in its Launch Systems group aimed at launching the types of satellite Swales builds.
But Murphy said that while ATK sees “a growing, very significant international market for small, simple satellites,” the company is essentially barred from serving it because of U.S. export controls. In order to get into the international satellite market you have to have your development off shore,” Murphy said, mentioning that ATK “came close” to acquiring a Canadian company he declined to name, but the offer ultimately was rebuffed.
Murphy said ATK would like to buy Boulder, Colo.-based satellite and sensor manufacturer Ball Aerospace & Technologies Corp. if the company were for sale, but said Ball would not
“bring the international business” that a Canadian, German or French satellite company would.
In addition to seeking acquisitions, ATK hopes to convince the U.S. Defense Department to change the way it contracts for propulsion elements for missiles. Murphy said the government could “shave six to 10 percent off the cost” of propulsion elements if it bought directly from ATK rather than have ATK work as a subcontractor to big lead systems integrators such as Boeing, Lockheed Martin, Northrop Grumman and Raytheon.
Murphy said he planned to discuss the idea later that day with the Pentagon’s top acquisition official, John Young.