Northrop Grumman To Buy Orbital ATK For $7.8 Bln Cash - Quick Facts

(RTTNews) - Defense contractor Northrop Grumman Corp. (NOC) Monday said it has entered into a definitive agreement to buy Orbital ATK, Inc. (OA), an aerospace and defense technologies company, for approximately $7.8 billion in cash, plus the assumption of $1.4 billion in net debt.

Orbital ATK shareholders will receive all-cash consideration of $134.50 per share. The agreement has been approved unanimously by the Boards of Directors of both companies.

Northrop Grumman expects the transaction to be accretive to earnings per share and free cash flow per share in the first full year after the transaction closes, and to generate estimated annual pre-tax cost savings of $150 million by 2020.

The transaction is expected to close in the first half of 2018 and is subject to customary closing conditions, including regulatory and Orbital ATK shareholder approval.

Upon completion of the acquisition, Northrop Grumman plans to establish Orbital ATK as a new, fourth business sector to ensure a strong focus on operating performance and a smooth transition.

On a pro forma 2017 basis, Northrop Grumman expects to have sales in the range of $29.5 to $30 billion based on current guidance.