Alliant Tech to buy MDA space and data units

NEW YORK (Reuters) - Alliant Techsystems Inc (ATK.N) said on Tuesday it will buy two units from Canada's MacDonald, Dettwiler and Associates Ltd (MDA.TO) for $1.325 billion, as the U.S. ammunition and rocket maker looks to expand its space technology and data processing business.

Alliant Tech said the addition of the units, which specialize in space-based radar and satellite imaging, would not affect earnings in fiscal 2009, but would add to earnings after that.

Under the deal's terms, Alliant Tech will buy all of MDA's Information Systems unit, which makes robotics for the International Space Station, a range of satellite technology and runs land-based data processing centers.

The Edina, Minnesota-based company will also buy the Geospatial Services part of MDA's larger Information Products unit, which sells satellite images of earth for weather, environment and mineral exploration purposes.

Those operations employ more than 1,900 people and expect annual revenues of about $500 million this year.

The deal is expected to close early in the first quarter of Alliant Tech's fiscal 2009, which starts in April.

ALLIANT BRANCHES OUT

When completed, Alliant Tech will create a new unit consolidating its space-related operations, including launch services, satellites, robotics and data systems on the ground.

The new space unit, operational from April 1, will be headed by Carl Marchetto, formerly an executive at rival Orbital Sciences Corp (ORB.N).

The move marks a significant shift in emphasis for Alliant Tech, which is the leading manufacturer of small and medium- caliber ammunition for the U.S. armed forces and also makes rocket motors for NASA.

For MDA, the sale means it will now focus on expanding its faster-growing information products business, including real- estate data.

"MDA plans to use most of the proceeds from this transaction to invest in acquisitions that are aligned with its strategic plan for information products," the company said in a statement, without giving any specifics.

After the deal is completed, British Columbia-based MDA will have about 1,100 employees in Canada, the United States and Europe, it said.

In June, MDA denied it was mulling the sale of its surveillance and space businesses after its shares shot up on speculation the company was seeking to sell the assets for around C$1 billion ($1 billion).

In a terse statement, it said at the time that there were no discussions with any potential buyers regarding such a sale.

MDA's Information Systems unit is the smaller of the company's two main divisions. In its third quarter, the business saw revenues fall to C$78 million from C$94 million a year earlier, because of "certain program delays," the company said in October.

(C$1 - $1.00)

(Additional reporting by Wojtek Dabrowski in Toronto)

(Editing by Leslie Gevirtz/Andre Grenon)