Rumors had been flying around for weeks, but today the uncertainty is over: rocket engine maker Pratt & Whitney Rocketdyne (PWR) is being bought from United Technologies Corporation (UTC) by GenCorp -- parent of Aerojet -- for $550 million. The deal almost doubles the size of GenCorp and will be financed with a combination of existing cash and debt.
"While it is not core to UTC's commercial building systems and aerospace businesses, Rocketdyne is a solid company and a national asset with many talented employees," said UTC chairman and CEO, Louis Chenevert .
PWR had been in play for months, part of a large plan by United Technologies to shed non-core assets after UTC bought Goodrich for $16 billion. Proceeds from the sale will be used to pay down short-term debt at UTC and clears up PWR's future. Earlier reports had suggested various private equity firms had made offers, with suggestions of one putting ex-NASA administrator, Michael Griffin in as president.
Over the decades, PWR and its predecessor companies provided the engines for more than 1,600 launches for the U.S. space program, including the Space Shuttle program, main engines for Atlas and Delta vehicles, missile defense systems and advanced hypersonic engines. The shutdown of the Space Shuttle program last year and a long-belated start to the successor Space Launch System (SLS) left PWR struggling with its future prospects.
New owner, GenCorp should be able to combine PWR's more specialized large liquid-fueled rocket engine business with its larger Aerojet portfolio of solid and liquid engines for more overall government and commercial business, including a larger role in NASA's SLS program. The heavy lift SLS will use four to five PWR RS-25 family engines in its first stage and a PWR RL-10 or multiple PWR J-2X (News - Alert) engines in the second stage to lift anywhere from 70 metric tons to nearly 130 metric tons into low Earth orbit (LEO).
One of the more interesting tidbits in this deal is it unites both U.S. licensees of Russian engines into a single company. PWR acquires the Russian RD-180 engine under license for use in the first stage of the Atlas V rocket, the workhorse of U.S. government launches. Aerojet has licenses to sell and manufacture the Russian NK-33 engine; the NK-33 is currently used in Orbital's Antares rocket scheduled for first launch later this year and is being proposed for use in liquid-fueled strap-on boosters for SLS.
The deal is expected to close by the first quarter of 2013, subject to the typical regulatory reviews. Given SpaceX's (News - Alert) recent success and recent blooming of other commercial space companies, it can be argued that the merger of PWR with Aerojet will not cause significant competitive issues.
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Edited by Brooke Neuman