GenCorp says it will keep Rocketdyne, which it intends to purchase from Pratt & Whitney in a $550 million deal, separate from its existing Aerojet rocket manufacturing operation, despite some duplication of capabilities between the two.
Although Aerojet and Rocketdyne work within the same small field, the companies rarely compete directly.
"There is less than 10% overlap between the two companies," says a senior Aerojet executive, who requested anonymity citing ongoing negotiations. "The first blush for people is that we're tooth-and-nail competitors, but the truth is we seldom compete on any R&D work."
One exception is the advanced SLS booster competition, in which both Rocketdyne and Aerojet proposals were selected for further study. GenCorp has yet to decide whether to support Rocketdyne's reborn F-1 or Aerojet's concept booster - or both.
"We have a lot of experience being in an inverted supply chain where typically we find ourselves occasionally, because of our technology, supporting multiple primes. We're very agile and able in supporting firewalls," says the executive. "There are lots of options there, we'll listen to the voice of the customer."
GenCorp chief executive officer Scott Seymour adds: "This transaction almost doubles the size of our company and provides additional growth opportunities as we build upon the complementary capabilities of each legacy company that has enabled a generation of human space travel and national security launch services." GenCorp expects to complete the acquisition process by mid-2013.
The sale will be financed by cash and debt issuance, says GenCorp. The long-rumoured sale comes seven years after P&W purchased the company from Boeing for $700 million.
Source: Flight International