MDA selling Canadarm business to U.S. firm

MacDonald, Dettwiler and Associates Ltd. is selling the division that developed the distinctive Canadarm space shuttle technology to a U.S. firm as part of a $1.325 billion cash deal.

Late Tuesday, Richmond, B.C.-based MDA said it had sold itsinformation systems, satellite and space mission businesses to Alliant Techsystems of Edina, Minn.

The sale includes the division that developed the Canadarm robotic arm that is used onspace shuttle missions and on the International Space Station. MDA acquired the Canadarm business from Spar Aerospace in 1999.

MDA saidit will now focus exclusively on its faster-growing information products business, which serves the property market with specialized mapping products.

The operations being sold "will have greater growth potential under a complementary U.S. owner," said Daniel Friedman, MDA's president and CEO.

Alliant Techsystemsis the world's largest producer of solid rocket motors and a main contractor on the first stage of NASA's next-generation ARES 1 rocket.

About 1,900 people including 800 engineers work at the MDA units that are being sold to Alliant. When the sale is completed, MDA will have about 1,100 remaining employees in Canada, the U.S. and Europe.

Alliant said it will incorporate the MDA assets intoa new space systems groupin April.

MDA said it will use most of the proceeds from the sale to invest in acquisitions to support its information products business.

Last June, the Wall Street Journal reportedthatMDA was thinking ofsellingitsspace division to a U.S. defence contractor. At the time, MDA denied that any talks were taking place.

The Journal reported that MDA management had longbeen frustratedby the difficulty of accessingthe U.S. defence market.With U.S. owners, that willno longer be the case.

Trading in shares of MDA was halted Tuesday for the announcement. When trading resumed on Wednesday, the stock surged $6.49 to $49.