Northrop Grumman (NYSE: NOC) is close to finalizing an agreement to buy Orbital ATK (NYSE: OA) as Northrop aims to broaden its portfolio of missiles and space platforms, Defense News reported Monday.
Defense News cited a Wall Street Journal report that says both companies could unveil the transaction as early as Monday and estimates the deal to reach more than $7.8 billion in cash.
Byron Callan, a director at Capital Alpha Partners, said the potential deal could help Northrop tap Orbital ATK™s knowledge and experience in electro-optical countermeasures and missiles.
Reuters also reported that the transaction™s final value could be worth more than $7.7 billion given Orbital ATK™s $6.3 billion in stock value and $1.4 billion in long-term debt.
Callan added Orbital ATK™s rocket motors could also broaden Northrop™s product offerings to the Defense Department.
Orbital ATK™s 2016 financials noted the Dulles, Virginia-based aerospace and defense contractor has contracts with the U.S. Army and NASA and Reuters added such contracts would provide Northrop annual revenue worth more than $4.4 billion.
