From: Orbital ATK
Posted: Wednesday, September 27, 2000
Orbital Sciences Corporation today announced that it has signed a definitive agreement with Smiths Industries plc to sell Orbital's Fairchild Defense electronics business to a U.S. subsidiary of Smiths for $100 million in cash. The transaction, which has been approved by the Boards of Directors of both companies, is expected to close in late October, subject to U.S. government regulatory reviews. Orbital anticipates using net proceeds from the divestiture to reduce bank debt and increase overall liquidity.
Orbital acquired the Fairchild Defense unit in 1994 as part of its purchase of Fairchild Space and Defense Corporation, based in Germantown, Maryland. Orbital subsequently merged the Fairchild Space business with its own satellite design and manufacturing division and operated Fairchild Defense as part of the company's Electronics and Sensor Systems Group, which today has operations in Germantown and Columbia, Maryland and Pomona, California. With revenues of $76 million in 1999, Fairchild Defense currently employs about 420 people, all of whom are expected to remain with the business unit after its sale to Smiths.
``Fairchild Defense has been an important contributor to Orbital over the last six years. Today, however, as we sharpen the company's strategic focus on our core space technology businesses and work to strengthen our financial position, we believe the sale of Fairchild Defense to Smiths Industries makes good sense for both companies,'' said Mr. David W. Thompson, Orbital's Chairman and Chief Executive Officer. ``The people and products of Fairchild Defense represent a natural fit with Smiths Industries' aerospace business, while its sale is an important part of Orbital's campaign to boost shareholder value for our investors,'' Mr. Thompson added.
Fairchild Defense develops and manufactures sophisticated defense electronics, avionics and mission management systems for use in military aircraft, helicopters and land vehicles. With over 30,000 electronics systems produced in the last 20 years, Fairchild Defense's products are used by the U.S. Armed Forces and militaries from over 25 friendly foreign governments on platforms such as the A-10, B-1, B-52, F-14, F-16 and F-22 aircraft as well as on Mirage, Hawk and Jaguar aircraft and Bradley, MLRS and Crusader land combat vehicles.
Smiths Industries is an international manufacturing company, operating in three distinct areas: aerospace electronics, medical systems and specialized industrial products. For the fiscal year ended July 31, 2000, sales were $2.1 billion. The United States is the largest single market for Smiths Industries' products, accounting for 45% of the company's sales. With its headquarters in London, England, the company employs over 16,000 people in more than 60 different businesses.
Orbital is one of the largest space technology and satellite services companies in the world, with 1999 total enterprise revenues (including revenues from unconsolidated affiliates) of about $915 million. The company, headquartered in Dulles, Virginia, employs over 5,000 people at major facilities in the United States, Canada and several overseas locations. Orbital is the world's leading manufacturer of low-cost space systems, including satellites, launch vehicles, electronics and sensors, satellite ground systems and related digital infrastructure. Its Magellan subsidiary is a pioneer in satellite-based navigation and communications products for consumer and industrial markets. Through its ORBCOMM and ORBIMAGE affiliates and ORBNAV subsidiary, Orbital is also a major operator of satellite-based networks that provide data communications, high-resolution imagery and automotive information services to customers all around the world.
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