IE 11 is not supported. For an optimal experience visit our site on another browser.

Alliant Tech to buy Canadian space business

Alliant Techsystems says it is buying two space-related units from Canada’s MacDonald, Dettwiler and Associates for $1.325 billion.
/ Source: staff and news service reports

Alliant Techsystems says it is buying two units from Canada’s MacDonald, Dettwiler and Associates for $1.325 billion, as the U.S. ammunition and rocket maker looks to expand its space technology and data processing business.

Alliant Tech said the addition of the units, which specialize in space-based radar and satellite imaging, would not affect earnings in fiscal 2009, but would add to earnings after that.

Under the terms of the deal, announced Tuesday, Alliant Tech will buy all of MDA’s Information Systems unit, which makes robotics for the international space station, a range of satellite technology and runs land-based data processing centers.

The Minnesota-based company will also buy the Geospatial Services part of MDA’s larger Information Products unit, which sells satellite images of earth for weather, environment and mineral exploration purposes.

Those operations employ more than 1,900 people and expect annual revenues of about $500 million this year.

The deal is expected to close early in the first quarter of Alliant Tech’s fiscal 2009, which starts in April, after regulatory and shareholder approval.

MDA built the robotic-arm assembly aboard the space station as well as the space shuttle's robotic arm. Alliant Tech, meanwhile, makes the solid-fuel rocket motors for the space shuttle.

Both companies are involved in efforts to construct new spaceships for supplying the station. For instance, Alliant Tech, also known as ATK, is a contractor for NASA's next-generation launch system, as well as a partner with Chicago-based Planetspace in a proposed project to build a low-cost space cargo delivery system for NASA's use. MDA has been in league with several spaceship teams, including SpaceX, Rocketplane Kistler and Spacehab.

MDA also worked in partnership with the Canadian Space Agency to develop Canada's two Radarsat Earth-imaging satellites, and the Geospatial Services unit is in charge of distributing Radarsat imagery outside Canada.

New unit to be created
When the deal announced Tuesday is completed, Alliant Tech will create a new unit consolidating its space-related operations, including launch services, satellites, robotics and data systems on the ground.

The new space unit, operational from April 1, will be headed by Carl Marchetto, formerly an executive at rival Orbital Sciences Corp.

The move marks a significant shift in emphasis for Alliant Tech, which is the leading manufacturer of small- and medium-caliber ammunition for the U.S. armed forces. MDA, meanwhile, said it will focus on expanding its faster-growing information products business, including real-estate data, once its space-related operations have been spun off.

“MDA plans to use most of the proceeds from this transaction to invest in acquisitions that are aligned with its strategic plan for information products,” the company said in a statement, without giving any specifics.

After the deal is completed, British Columbia-based MDA will have about 1,100 employees in Canada, the United States and Europe, it said.

This report includes information from Reuters, The Associated Press and