Orbital Sciences Sells Transportation Unit

Dallas Firm to Pay $42.5 Million

Orbital Sciences, a space technology manufacturer in Dulles, announced yesterday 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, in Columbia, 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 the District's buses.

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 buses are running on schedule and how many buses it needs to dispatchduring rush hour.

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

Orbital Sciences 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 its first-quarter revenue increased to $296 million, from $228.2 million in the comparable period last year. The stock closed at $26.09 a share, up 9.2 percent.

"We've repaired the balance sheet," Beneski said.