Space News: Should SpaceX Fear the New Orbital ATK?

September 8, 2014 – 12:55 pm

ImagesIt's official. Orbital Sciences and Alliant Techsystems will merge into a single aerospace and defense company called Orbital ATK, which will begin trading on the New York Stock Exchange on Feb. 10 with the ticker "OA." Shareholders of each company showed overwhelming support for the merger - and for good reason. The combined company will bring the satellite expertise of Orbital Sciences and rocket-motor expertise of Alliant under one roof.

The merger will open opportunities to compete for larger defense contracts requiring more integrated systems, and enable more impressive growth in satellites and launch vehicles. After the spectacular launch failure of an Antares rocket last October, and failed attempts to woo NASA with designs for the Liberty spacecraft, which has since been canceled, it's clear both companies will benefit from combining their efforts.

GInvestors are probably wondering if the new Orbital ATK will steal some thunder from SpaceX. After all, Elon Musk's baby is often considered the leader in the Space Race 2.0. While the new company isn't expected to land a reusable rocket on a drone ship anytime soon, investors are presented with a better investment opportunity in the emerging commercial spaceflight industry after the merger. Here's why.

Merger details
Orbital Sciences and Alliant Techsystems shareholders were certainly aware of what was at stake, as 99% and 97%, respectively, voted in favor of the merger. To complete the deal, Alliant has agreed to spin off its firearms sporting equipment company to its shareholders only. The new company, Vista Outdoor, will also begin trading as a public company on Feb. 10, and will be led by Alliant's current CEO Mark DeYoung.

That leaves the rest to Orbital ATK, which will be led by Orbital Sciences CEO David Thompson. The $5 billion aerospace and defense company will boast key synergies that are expected to be fully integrated by the end of 2016, including about $75 million in annual purchases between Orbital Sciences and Alliant.


Source: www.fool.com

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