The company that operates the Lake City Army Ammunition Plant in Independence is undergoing a major ownership restructuring.
The company says it has 2,000 employees at Lake City, and it gave no indication of any substantial changes in operations there.
The company is ATK, or Alliant Techsystems. On Tuesday, it announced two moves. First, it is spinning off its Sporting Group to ATK shareholders. Second, the company’s Aerospace and Defense Groups – which include Lake City – will be merged with another company, Orbital Sciences Corporation.
The new company will be called Orbital ATK Inc., and ATK shareholders will own 53.8 percent of its stock. The company, with 13,000 employees, is projected to have annual revenues of $4.5 billion. It will be based in Virginia.
“For both companies, there are compelling operational and financial synergies that can be realized from year one, allowing us to achieve faster growth and lower cost in ways that benefit both our customers and our investors,” David Thompson, Orbital’s chairman, president and chief executive officer said in a conference call announcing the deal.
“So I believe,” Thompson continued, “this combination will benefit both Orbital and ATK shareholders in both the short term and the long term by unlocking substantial, immediate value and also by achieving substantial, profitable growth for years to come.”
During the conference call, executives repeatedly emphasized the possibilities for Orbital ATK in aerospace and made no mention of Lake City. A call to ATK executives at Lake City on Tuesday was not returned. Overall, armaments and ammunition are projected to produce about one-fifth of the new company’s revenues.
The plant in Independence makes small-caliber ammunition for the U.S. military and NATO. The Army has owned the plant for decades stretching back to World War II. ATK has held the Army contract to operate it for many years, and in the fall of 2012 it won a new seven-year contract with possible extensions for another three years.
In explaining the spinoff of the sporting division, ATK executives said hunting and aerospace/defense are fundamentally different markets with different demands and opportunities.
The spinoff-and-merger deal is expected to close by the end of the year.