Orbital Shares Rise Most in 11 Years on ATK Merger

Orbital Sciences Corp. (ORB), a maker of rockets and satellites, rose the most in 11 years after announcing plans for a $5 billion combination with Alliant Techsystems Inc. (ATK)’s aerospace and defense businesses.

Orbital surged 17 percent to $30.96 in New York trading today, the biggest gain since Aug. 9, 2002. The shares have jumped 75 percent in the past year, reflecting the company’s success in launching unmanned supply ships to the International Space Station.

Alliant Techsystems Inc., known as ATK, rose 6.8 percent to close at $148.22 in New York.

ATK, based in Arlington, Virginia, said in a statement today it will split into separate companies: an outdoor sports group that provides commercial ammunition and rifles, and another with its aerospace and defense groups.

The split will be followed by a tax-free, all-stock merger between Dulles, Virginia-based Orbital Sciences and ATK’s aerospace and defense business by the end of the year, according to an Orbital statement. Alliant also makes military ammunition, missiles and rocket-propulsion systems.

“There’s very little, if any, product overlap, but there is a very longstanding relationship between the companies,” David Thompson, Orbital’s chairman and chief executive officer, said in a phone interview. “We know each other very well. We’re not moving into unchartered territory.”

Thompson will be CEO of the new company, to be called Orbital ATK Inc.

Orbital and Alliant had been discussing the merger for about six months, Mark DeYoung, ATK’s CEO and president, said in an interview.

“We recognized the best outcome would be a merger of equals,” said DeYoung, who will be chairman and CEO of the outdoor sports spinoff. “In this one, the fit is so natural and the solution is so logical.”

Orbital shareholders will receive 0.449 shares of ATK common stock for each share or Orbital common stock. Alliant shareholders will own 53.8 percent of the new company, and Orbital shareholders will hold 46.2 percent.

To contact the reporter on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net

To contact the editors responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net Steve Geimann

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