05 October 2014
The planned merger of the defense and space portions of ATK with Orbital Sciences will create a $4.5 billion company. Orbital and ATK's managements maintain that they are creating a much stronger company that will benefit from accelerated growth.
In space, Orbital will bring its systems integration capabilities and ATK will provide its techologies. The result will be a much larger space company. Orbital's space work is about $1.5 billion annually, with ATK's space work totaling $1.2 billion.
Adding system design and integration capabilities to ATK's traditional strengths in tactical missiles or advanced armament should add to the combined companies strength in those markets.
The new company should also benefit from prospects for vertical integration that could improve its competitiveness by cutting costs.
Orbital has already done this in areas such as electronics, guidance systems, and communication systems -- both for rockets and satellites.
By combined ATK's pro pul sion capabilities, there are potentially greater savings to be reaped since it represented 25% to 35% of the costs of a launch vehicle. That means internal value added on launch vehicles would go from 45% to 50% of the total costs up to 70% or 80%.
Orbital is al ready considering an ATK proposal to replace Russian NK-33 engines with a solid rocket propulsion system in its medium class space launch vehicle, Antares.
On satellites, ATK's work adds 10% to 20% of the total cost.