Orbital Sciences Corporation
today announced that it has signed a definitive agreement with
Smiths Industries plc to sell Orbital’s Fairchild Defense electronics business
to a U.S. subsidiary of Smiths for $100 million in cash.
The transaction,
which has been approved by the Boards of Directors of both companies, is
expected to close in late October, subject to U.S. government regulatory
reviews.
Orbital anticipates using net proceeds from the divestiture to
reduce bank debt and increase overall liquidity.
Orbital acquired the Fairchild Defense unit in 1994 as part of its
purchase of Fairchild Space and Defense Corporation, based in Germantown,
Maryland.
Orbital subsequently merged the Fairchild Space business with its
own satellite design and manufacturing division and operated Fairchild Defense
as part of the company’s Electronics and Sensor Systems Group, which today has
operations in Germantown and Columbia, Maryland and Pomona, California.
With
revenues of
$76 million in 1999, Fairchild Defense currently employs about
420 people, all of whom are expected to remain with the business unit after
its sale to Smiths.
“Fairchild Defense has been an important contributor to Orbital over the
last six years.
Today, however, as we sharpen the company’s strategic focus
on our core space technology businesses and work to strengthen our financial
position, we believe the sale of Fairchild Defense to Smiths Industries makes
good sense for both companies,” said Mr. David W. Thompson, Orbital’s Chairman
and Chief Executive Officer.
“The people and products of Fairchild Defense
represent a natural fit with Smiths Industries’ aerospace business, while its
sale is an important part of Orbital’s campaign to boost shareholder value for
our investors,” Mr. Thompson added.
Fairchild Defense develops and manufactures sophisticated defense
electronics, avionics and mission management systems for use in military
aircraft, helicopters and land vehicles.
With over 30,000 electronics systems
produced in the last 20 years, Fairchild Defense’s products are used by the
U.S. Armed Forces and militaries from over 25 friendly foreign governments on
platforms such as the A-10, B-1, B-52, F-14, F-16 and F-22 aircraft as well as
on Mirage, Hawk and Jaguar aircraft and Bradley, MLRS and Crusader land combat
vehicles.
Smiths Industries is an international manufacturing company, operating in
three distinct areas:
aerospace electronics, medical systems and specialized
industrial products.
For the fiscal year ended July 31, 2000, sales were $2.1
billion.
The United States is the largest single market for Smiths
Industries’ products, accounting for 45% of the company’s sales.
With its
headquarters in London, England, the company employs over 16,000 people in
more than 60 different businesses.
Orbital is one of the largest space technology and satellite services
companies in the world, with 1999 total enterprise revenues (including
revenues from unconsolidated affiliates) of about $915 million.
The company,
headquartered in Dulles, Virginia, employs over 5,000 people at major
facilities in the United States, Canada and several overseas locations.
Orbital is the world’s leading manufacturer of low-cost space systems,
including satellites, launch vehicles, electronics and sensors, satellite
ground systems and related digital infrastructure.
Its Magellan subsidiary is
a pioneer in satellite-based navigation and communications products for
consumer and industrial markets.
Through its ORBCOMM and ORBIMAGE affiliates
and ORBNAV subsidiary, Orbital is also a major operator of satellite-based
networks that provide data communications, high-resolution imagery and
automotive information services to customers all around the world.
