Orbital Science Sells Transportation Unit

Dulles Firm to Pay $42.5 Million

By Kendra Marr

Thursday, April 17, 2008

Orbital Sciences, a space technology manufacturer in Dulles, announced Thursday that it agreed to sell its transportation management division for $42.5 million in cash.

The deal with Affiliated Computer Services — an information technology company based in Dallas that manages Metro’s SmarTrip card sales and E-ZPass toll collection — marks the sale of Orbital’s last noncore business, completing the company’s strategic refocusing on satellites and rockets. The sale is expected to close this summer.

“They’ve had a rocky time coming down in size, but this was a good last move,” said Paul Nisbet, an aerospace analyst with JSA Research in Newport, R.I.

Orbital’s Transportation Management Systems group, located in Columbia, Md., uses satellite navigation and wireless communications to administer and dispatch fleets of municipal buses and trains. The unit serves about 60 transit agency customers across the country and has installed systems on nearly 30,000 vehicles, including Baltimore’s light rail and buses in the District.

This year the unit expects it will do $55 million to $60 million in business, said Orbital spokesman Barron Beneski said.

Affiliated Computer Services operates public transportation ticketing services in 1,000 cities worldwide. This acquisition will allow the company to create an integrated transportation system. For instance, it will be able to monitor the number of people entering and leaving a bus, whether or not those buses are running on schedule and how many buses it needs to dispatch during rush hour.

Following the sale, all 116 employees will continue to work in the Columbia offices, said Eric Jean, managing director of public transport.

Orbital has been shedding its peripheral businesses over the past decade.

In the mid-1990s, Orbital began experimenting with subsidiaries to expand the company. It created Orbital Imaging, which employed a constellation of satellites to capture spy-grade photographs of Earth for commercial clients, and Orbital Communications, a joint venture with Teleglobe that used satellites for data communications. Both ventures lost money during the telecom bust and eventually filed for bankruptcy.

“We found ourselves too heavily leveraged for our own comfort,” Beneski said. “So we looked to sell a set of businesses — those that weren’t real core businesses — to focus on what we know best, satellites and rockets.”

Orbital has been looking for a buyer since 2002, but found it difficult to land a decent price in the limited market for transportation products, Nisbet said.

Refocusing has helped the company recover. Yesterday Orbital reported that first-quarter revenues increased 30 percent to $296 million in 2008, from $17.5 million in 2007. The stock closed at $26.09, up 9.2 percent.

“We’ve repaired the balance sheet,” Beneski said.

Tagged: business_news, Orbital Sciences

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