ATK is splitting off its aerospace division to merge that division with Orbital Sciences.


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The competition cools? ATK is splitting off its aerospace division to merge that division with Orbital Sciences.

Alliant Techsystems Inc. ATK on Tuesday said it plans to split into two independent companies, one focused on outdoor sports and hunting products, the other centered on aerospace and defense. The outdoor sports operations–which produce commercial ammunition, hunting products and other related items–will be spun off to Alliant shareholders in a tax-free transaction, the company said. The segment generated $2.2 billion in revenue during 2013, Alliant said.

After the separation, Alliant said it plans to merge the aerospace and defense business–which produces rocket propulsion systems and satellite systems, among other things–with rocket and space-system developer Orbital Sciences Inc. The company will be named Orbital ATK Inc.

More here. The company press releases call this “a merger of equals” and do not make it clear what instigated the deal. Did Orbital offer to buy ATK’s aerospace division with its ammo business spun off, or did ATK want to sell off its aerospace division to focus on ammo? I wonder. The ammo business right now is booming, while aerospace remains a much more risky venture. ATK might have wanted to focus on ammo, where the money is, and proposed the idea to Orbital.

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4 comments

  • geoffc

    Beyond the SRB’s, who else uses ATK solids? Minotaur, Pegasus, antares all use Castor and other solid engines from ATK. And 2 SRB’s every 4 years is not a recipe for a business model.

    Not sure if they still make booster for ICBM’s or not, but beyond those two customers, who buys a solid from ATK these days?

  • Tom Billings

    While geoffc is correct about ammo having more revenue today, ATK may also be the first old-line NASA Contractors Club business to realize they cannot build the reusable rockets that SpaceX is demonstrating are indeed possible. ATK doesn’t have the corporate culture to do it, and they know it. Not too odd, given their total emphasis on solids.

    Even in the solids business, the AF will shut down one whole set of protestors against their first clean-sheet post-Cold War ICBM if they pick a propellant like ALICE (Aluminum/Ice). Having a horde of people screaming that producing a rocket meant poisoning whole valleys in Utah the last time (ammonium perchlorate production) will do nothing to move through Congress a program they know will meet stiff resistance anyway. Perhaps ATK has been given “the word” on this as well.

  • Pzatchok

    ATK or Alliant Tech Systems is one of the last gunpowder manufactures in the US all the other either buy in bulk off of them or import it.

    The fact is Alliant doesn’t have to actually build the SRB’s. They are the only domestic source for the propellent so they will make a profit no matter who builds what as long as the government demands that contractors try to buy domestic.

    With an ever increasing amount of launch companies a few of them will inevitably want to use solids for that extra boost. Someone will take over manufacturing.

  • Kelly Starks

    Murger of equals?
    Most former defense contractors (or aerospace companies) have gotten out of the business’ since the profit margins are low and droping as the market declines. It could be shedding that will mean the outdoor sports and hunting products parts will make ATK a much more appealing buy for stockholders.

    But Orbital as a Equal? They aren’t that big last I remember?

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