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Alumni-Founded Aerospace Pioneer Orbital Acquired for $7.8 Billion
David Thompson
President and CEO, Orbital ATK
(courtesy Orbital ATK)
David Thompson
President and CEO, Orbital ATK
(courtesy Orbital ATK)
Orbital ATK—which was founded in 1982 by three HBS classmates—was sold this week to defense contractor Northrop Grumman for a reported $7.8 billion. In this excerpt from the March 2016 Bulletin, Orbital CEO David Thompson (MBA 1981) reflected on the company’s beginnings, dreamed up in the wake of a funding decline for NASA—Thompson’s employer at the time—in the 1970s:
Thompson began thinking about a new kind of organization—a private-sector firm that would attract young engineers to work on exciting projects like designing rockets for satellite delivery. Besides, he held the “naive view that starting a space company might be fun and profitable.” Founded with two HBS classmates, Bruce Ferguson (MBA 1979, JD 1981) and Scott Webster (MBA 1981), with capital supplied by maxed-out credit cards, Orbital Sciences Corporation launched in April 1982, the first corporate entrant at the prime contractor level in nearly three decades.
According to Bloomberg, the acquisition is the largest defense industry deal since Lockheed Martin bought Sikorsky Aircraft two years ago, and will make Northrop the fourth-largest Pentagon contractor. In a statement about the deal, Thompson said: “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. Our employees will also benefit from greater development and career opportunities as members of a larger, more diverse aerospace and defense enterprise.”
The deal is expected to close in the first half of 2018.
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