Va. satellite firm to buy Fairchild

June 02, 1994|By Ted Shelsby | Ted Shelsby,Sun Staff Writer

In a move that could make it an industry leader in the production and launch of small satellites, Orbital Sciences Corp. has agreed to buy Germantown-based Fairchild Space and Defense Corp. from its French owner for about $95 million.

The acquisition would double employment for Dulles, Va.-based Orbital and boost revenue in its satellite operations "two- to threefold," the company said yesterday.

"This an exciting move for us, both strategically and financially," said David E. Thompson, president and chief executive. He said the acquisition could make Orbital a major force in the small-satellite business, something it hadn't expected to achieve for another two or three years.

Mr. Thompson said Orbital is scheduled to ship five or six small, but advanced, satellites this year. Next year, he said, at least 25 satellites are scheduled for construction and launch.

Under terms of the preliminary agreement, Orbital will pay Matra Hachette Group $30 million in cash and about $65 million in stock for Fairchild, once a part of Fairchild Industries Inc., the Montgomery County-headquartered company best known for its production of the A-10 attack plane at its plants in Hagerstown and on Long Island in New York.

Mr. Thompson said Fairchild will add about $60 million to Orbital's sales this year and more than $125 million next year. Orbital reported sales of $190.2 million in 1993, and net income of $4.6 million.

The acquisition is expected to be completed in a month and will bring employment at Orbital to more than 2,000, at least initially.

"Whenever you put two companies together there is always some opportunity for redundancy, but we don't see any significant layoffs in the future," Mr. Thompson said. "We will probably not be hiring as many people as we planned to hire."

Fairchild is a developer and producer of medium-sized satellites and other space and information technology products. It was involved in the development of the TOPEX/Poseidon satellite launched in 1992 to help understand weather patterns and water currents by measuring peaks and valleys in the surface of oceans.

Fairchild also makes electronic equipment for military planes and products for the space shuttle program.

Matra Hachette, of Paris, produces many products for the space and automotive markets and is involved in the publishing business.

Orbital, which had its initial public offering in 1990, is best known for its development of the Pegasus rocket.

The winged rocket is carried aloft by an airplane and launched from an altitude of about 40,000 feet. After dropping from the plane, its rocket motor ignites and pushes the craft into orbit.

Pegasus is designed to carry a satellite weighing between 100 and 500 pounds to an orbit of 150 to 500 miles.

In March the company successfully launched its first Taurus, a pad-launched rocket designed to carry a payload of 2,000 to 3,000 pounds.

Orbital Sciences' stock closed unchanged yesterday, at $22 a share.

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