Northrop Grumman Makes $9.2B Deal To Purchase Orbital

By Linda Cicoira — Orbital ATK Inc., the company that launches rockets from Wallops Island to the International Space Station (ISS), is being sold to Northrop Grumman Corp. for $9.2 billion, the two companies announced this week. 

The next local launch is slated for just after 8 a.m., Nov. 10. It is the ninth Cygnus cargo freighter on the eighth operational cargo delivery flight to the ISS. The mission is known as OA-8. It will fly in the Antares 230 with two RD-181 first stage engines and a Castor 30XL second stage. Crew supplies and science experiments will be among the several tons of items transported.

The agreement with Northrop Grumman was broken down to $7.8 billion in cash, plus the assumption of $1.4 billion in net debt. “Orbital shareholders will receive all-cash consideration of $134.50 per share.” The agreement was approved unanimously by the boards of directors of both companies. Closing was set for 2018 and is subject to conditions, including regulatory and Orbital shareholder approval.

“The acquisition of Orbital ATK is an exciting strategic step as we continue to invest for profitable growth,” said Wes Bush, chairman, chief executive officer and president of Northrop Grumman. “Through our combination, customers will benefit from expanded capabilities, accelerated innovation and greater competition in critical global security domains. Our complementary portfolios and technology-focused cultures will yield significant value creation through revenue synergies associated with new opportunities, cost savings, operational synergies, and enhanced growth. We look forward to welcoming Orbital ATK’s talented employees to Northrop Grumman, and believe our combined strength will benefit our customers and shareholders.”

The company is expecting an estimated annual cost savings of $150 million by 2020. It expects to have sales in the range of $29.5 to $30 billion based on current guidance.

David Thompson, president and chief executive officer of Orbital, said the agreement reflects the company’s value that has been generated for our customers, shareholders and employees. 

“The unique alignment in culture and mission offered by this transaction will allow us to maintain strong operational performance on existing programs while we pursue new opportunities that require the enhanced technical and financial resources of a larger organization,” he continued. “Our employees will also benefit from greater development and career opportunities as members of a larger, more diverse aerospace and defense enterprise.”

The Ionospheric Connection Explorer (ICON) is scheduled to study the frontier of space described as “the dynamic zone high in our atmosphere where Earth weather and space weather meet,” with a launch from Kwajalein Atoll in the Republic of the Marshall Islands, aboard an Orbital ATK Pegasus, on Dec. 8, 2017.

Breaking Ground on a New Era: CBBT Begins Work on First Parallel Tunnel

By Stefanie Jackson — Chesapeake Bay Bridge-Tunnel staff, Virginia politicians, and local citizens gathered together on Island One on Sept. 18 to reflect on CBBT history before “tunneling forward” to its future, at the groundbreaking ceremony for the Thimble Shoal parallel tunnel project.

The actual groundbreaking occurred four weeks prior at Island Two at Thimble Shoal, with heavy equipment operators already hard at work to make way for the parallel tunnel at the southern end of the CBBT, near Virginia Beach. Construction will begin at Island One on Oct. 1, following the closings of the fishing pier on Sept. 30, and the Virginia Originals gift shop and Chesapeake Grill restaurant on Sept. 24.

The 12 members of the CBBT Commission were recognized, who include Executive Director Jeffrey Holland, Chairman Frederick Stant, Vice Chairman Thomas Meehan, and Secretary-Treasurer of the Commonwealth Transportation Board John Malbon; Chris Snead, Jeffrey Rowland, Karen James, and Reeves Mahoney, of the Tidewater region; and Eastern Shore members Robert Bloxom Sr., Paul Bibbins, Jeffrey Walker, and Stephen Johnson. Each commissioner works five to 20 hours per month in ongoing support of the CBBT. Also recognized was Lucius Kellam Jr., the first chairman of the commission when it formed in 1954.

The common theme heard throughout the ceremony was the uniquely Virginian foundation on which the CBBT’s success is built and maintained, with commissioners and politicians working closely together. Virginia Secretary of Transportation Aubrey Layne said the CBBT “has been successful because the commission took the politics out.” Del. Robert Bloxom Jr. called the CBBT “a government entity run like a business.” Lt. Gov. Ralph Northam said, “We do things the Virginia way … we put partisanship aside … and do what’s best for Virginia.” Sen. Lynwood Lewis said the CBBT “has been run in a very Virginian fashion … a model for other facilities to emulate.”

Speakers emphasized the CBBT costs less per mile than other bridges and tunnels along the east coast. The continued operation, maintenance, and expansion of this lifeline across the Chesapeake Bay would not be possible if the 1964 toll cost of $4 had never been raised. The original bridge and two-tunnel system cost around $100 million to complete in 1964; the third tunnel, undergoing construction next month, will cost $756 million. The parallel tunnel will relieve traffic congestion near Virginia Beach during the busy summer tourist season, and will serve as redundancy to the original tunnels in case of an emergency. 

When the new Thimble Shoal tunnel opens, it will serve southbound traffic, with the old tunnel serving northbound traffic.

Monday’s groundbreaking was the first of four ceremonies celebrating milestones of the CBBT parallel tunnel project. The second will occur in approximately 12 months, after manufacture of the tunnel boring machine is completed in Germany and the finished product is transferred in sections to the CBBT worksite. The third, when construction reaches the opposite end of the tunnel, is scheduled for 2020, with the final ribbon-cutting set for 2022.