Alliant Techsystem Spinoff Of Vista And Orbital Sciences Merger Set For February Launch

The dramatic explosion of Orbital Sciences'(ORB) Antares rocket on October 28 delayed a planned merger with Alliant Techsystems(ATK), but it will not derail it.  Last April, Alliant announced it would spin off its sporting goods business and subsequently merge its defense business with Orbital. The sporting goods business will be known as Vista Outdoor,Inc.  As might be imagined, the explosion prompted a reevaluation of the deal.

Several weeks ago, on November 17, the companies announced that after a review, they were committed to moving forward with the transactions.  Shareholder meetings to vote on the transaction were pushed back from December 9, 2014 to January 27, 2015, with the transaction expected to be completed in February 2015.

Since the incident, the companies have conducted a thorough review and analysis of the launch failure and Orbital’s proposed recovery plan and long-term competitive position.  Following this review, ATK’s board of directors continues to support the strategic merits of the transaction and recommends that ATK stockholders vote to approve the issuance of shares to Orbital stockholders. Orbital’s board of directors also continues to recommend that Orbital stockholders vote to approve the proposed transaction.

“During the course of the last two weeks, both companies have diligently evaluated and analyzed information relating to the Antares incident and Orbital’s go-forward plan,” said Mark DeYoung, President and Chief Executive Officer of ATK. “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. The strategy to spin off our sporting business and merge our A&D businesses with Orbital supports long-term value creation, enhances the competitive position of both our sporting and A&D businesses, and makes long-term sense for our shareholders, employees, company, and our very diverse set of customers.”

“Working with NASA, our primary Antares customer, and our industrial suppliers, Orbital has implemented a comprehensive go-forward plan to fulfill the company’s commitment to the space agency’s commercial cargo program and to upgrade the propulsion system on the Antares rocket. As previously announced, Orbital does not believe this plan will cause material adverse financial changes in 2015 or future years,” said David W. Thompson, Chairman, President and Chief Executive Officer of Orbital.

On December 4, the company announced that it had received clearance from the DOJ to move forward with the transaction, and reiterated the same timeline.

the U.S. Department of Justice (“DOJ”) has unconditionally cleared the proposed merger of ATK’s Aerospace and Defense Groups with Orbital. The U.S. Federal Trade Commission (“FTC”) informed ATK and Orbital today, December 4, 2014, that the FTC and DOJ terminated the Hart-Scott-Rodino waiting period effective December 4, 2014. As previously announced, ATK and Orbital have entered into a transaction agreement, whereby ATK’s Aerospace and Defense Groups will merge with Orbital immediately following the spin-off of ATK’s Sporting Group business to ATK stockholders as a newly formed company called Vista Outdoor Inc. The companies anticipate completing the transaction in February 2015, subject to the satisfaction of remaining closing conditions, including the approval of both ATK’s and Orbital’s stockholders at special meetings scheduled for January 27, 2015.

Disclosure: The author has no position in any stock mentioned