Business

Sunday, Nov. 08, 2009

Northrop sells advisory-services unit for $1.65B

LOS ANGELES — Northrop Grumman said Sunday it agreed to sell its advisory services business TASC Inc. to private equity firm General Atlantic LLC and affiliates of Kohlberg Kravis Roberts & Co. for $1.65 billion in cash.

The No. 2 defense contractor said it will use the proceeds to fund a new $1.1 billion increase to its stock-buyback program. At the end of the third quarter, the company had about $280 million remaining on its $2.5 billion share-repurchase plan.

Northrop Grumman is the parent company of Northrop Grumman Ship Systems, headquartered in Pascagoula, which has shipyards in Pascagoula, Gulfport, New Orleans and Tallulah, La. Northrop Grumman’s Integrated Systems operates the Unmanned Systems Center in Moss Point.

TASC, based in Chantilly, Va., serves intelligence, defense and civil agencies. It has about 5,000 employees and is expected to record 2009 revenue of $1.6 billion.

Northrop doesn’t expect the deal to affect its 2009 net income or earnings per share. The company also said after the stock buybacks, the deal won’t affect its 2010 earnings per share from continuing operations.

The transaction is expected to close by the end of the year.