Northrop Grumman to Sell Advisory Services Division TASC

Cash deal of $1.65 billion will be used to repurchase shares of common stock.

Defense contractor Northrop Grumman announced Nov. 8 it had signed a definitive agreement to sell its advisory services business, TASC, for $1.65 billion in cash. The purchaser is an investor group led by General Atlantic LLC and affiliates of Kohlberg Kravis Roberts & Co.

TASC employs approximately 5,000 people and expects 2009 revenue of about $1.6 billion.

The company said it expects the sale to generate net cash proceeds, after taxes, of about $1.1 billion that will be used to repurchase shares of common stock. The transaction is expected to be neutral to Northrop Grumman's 2009 net income and its 2010 earnings per share from continuing operations.

"This transaction is in the best interest of Northrop Grumman's customers, employees and shareholders," said Ronald D. Sugar, chairman and chief executive officer. "It reflects Northrop Grumman's desire to align quickly with the government's new organizational conflict of interest standards."

The transaction, which is subject to customary regulatory conditions, is expected to close by the end of the year.

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