ATK (NYSE: ATK) and Nioa Nominees Pty Ltd. (NIOA) have agreed to form ATK-NIOA Munitions (ATK-NIOA), an Australian-based joint venture company to deliver a commercially viable business model to the Australian Commonwealth in support of the Domestic Munitions Manufacturing Arrangements (DMMA).
The DMMA project seeks to establish a successor operator for the Benalla Munitions facility in regional Victoria and the Mulwala Explosives and Propellant facility in regional New South Wales. ATK-NIOA has submitted a proposal in response to a RFP issued by the Australian Defence Materiel Organisation (DMO) to be operators of both the Benalla and Mulwala facilities for a potential 10-year contract period.
“The teaming of ATK with NIOA provides the Commonwealth the full depth of experience of the world’s largest ammunition manufacturer and the strong heritage of Australia’s own leading ammunitions supplier,” says Mike Kahn, president of ATK Defense Group. “The ATK-NIOA team will use a world-class approach to both the Benalla and Mulwala facilities, just as ATK does at the eight ammunition production facilities we operate in the United States, and with our international network of distribution points.”
“The formation of ATK-NIOA munitions will create a new major defence prime contractor in Australia supported by one of the largest Defence and Aerospace companies in the world. The competitive landscape for Defence contractors and for DMO will change overnight,” says Robert Nioa, managing director of NIOA. “Tapping in to ATK’s global sales network is going to create jobs and export opportunities for the Benella and Mulwala facilities without a doubt, but the company will be focused on long-term growth beyond the immediate DMMA opportunity.”
ATK is the world’s largest manufacturer of ammunition, and NIOA is Australia’s largest distributor of commercial and law enforcement ammunition. ATK-NIOA delivers viable commercial operations in Australia by making products relevant for the Australian Defence Force, introducing new commercial products, and optimising the productive capacity of the facilities. The Benalla and Mulwala facilities will be integrated into ATK’s Global Supply Chain, providing a home for new products and expanding the company’s capabilities and production capacity. ATK’s munitions representatives, distributors and sales network in 100 countries around the world will provide an outlet for Australian-made products.
ATK is the majority stakeholder in ATK-NIOA and will have operational control. ATK will contribute process, product, and facilities engineering expertise and integrate DMMA facilities’ products into its global sales portfolio. NIOA will manage the sales, marketing and distribution functions for the joint venture.
Source: Alliant Tech Systems, Inc (ATK) (NYSE: ATK)
Date: Jul 31, 2013