A “sale pending” sign has been placed in front of a house that is up for sale in Greenbrae, California. This sign indicates that a buyer has made an offer and the sale is currently in progress.
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Overview: M&A Activity in the Space Sector
The space sector has been experiencing numerous mergers and acquisitions since the beginning of the year, and the pace of deal-making is only increasing. I recently had conversations with bankers, private equity partners, and investors to gain insight into the current state of M&A activity in the industry. The consensus among them was unanimous: “The dominoes are starting to fall.”
According to one financier, this is a normal market cycle, and we are witnessing a shakeout where weaker companies are failing, leading to a lot of consolidation. Another participant in the discussions stated that we are still in the early stages of determining the actual demand versus the hype surrounding the industry. This period of companies selling or failing is expected to last for the next 12 months, unless there are unexpected and dramatic changes in macroeconomic conditions. To ensure the confidentiality of these discussions, CNBC has agreed to keep the identities of the participants anonymous.
Several notable companies are currently being explored for potential sales in the high-end M&A market. United Launch Alliance, a joint venture between Lockheed Martin and Boeing, is reportedly being shopped around, while packaging giant Ball is looking to sell its aerospace subsidiary. United Launch Alliance referred inquiries about the sale process to Boeing and Lockheed, and Ball Aerospace declined to comment.
Surprisingly, even Boeing is considering options for its space business, with the potential for divesting or selling its satellite manufacturing unit. Although no official decisions have been made, Boeing is actively exploring different possibilities. However, the company did not respond to a request for comment on this matter.
It is important to note that not all M&A deals in the space sector are created equal. The markets and underlying technologies of space companies can vary significantly, and the reasons for a company’s sale or failure are often unique. Buyers, on the other hand, may have distinct motivations for pursuing a deal, such as acquiring talent, adding complementary services or technology, or seeking deep discounts. As one expert put it, “This is an incredible opportunity for those who have built a business on sound economics. Now is the time to move and clean up.”
What’s Happening in the Industry
Ursa Major and Orbit Fab, two Colorado-based companies, have recently conducted layoffs due to the challenging funding environment they face.
Space Force has assigned 12 missions to SpaceX and United Launch Alliance under the NSSL Phase 2 contract, with each company receiving six assignments. The average launch price for SpaceX is $90.2 million, while United Launch Alliance’s average is $105.5 million per launch.
The debut launch of ULA’s Vulcan rocket is expected to be delayed until the fourth quarter of this year due to modifications being made to the upper stage following an explosion during testing in March.
SpaceX has successfully launched its 40th and 41st missions of the year, including the Transporter-8 rideshare mission that carried 72 satellites for multiple companies. This launch also marked the company’s 200th successful landing of an orbital rocket booster.
Stoke Space is testing rocket direction control as it continues to work towards developing a fully reusable rocket.
Major Industry Moves
The Pentagon’s Space Development Agency has awarded SAIC a $64 million contract to develop and maintain a virtual “factory” in orbit for software applications related to the agency’s low Earth orbit constellation.
BlackSky has secured a contract worth “more than” $30 million to provide satellite imagery services to an undisclosed international military customer for multiple years.
NASA has chosen SpaceX for a cube satellite launch contract, under which SpaceX will launch four of the agency’s cubesats no earlier than 2025 on a Falcon 9 rocket.
Tomorrow.io has raised $87 million in funding to expand its weather and climate satellite constellation. The funding round was led by Activate Capital and included participation from several other investors.
Market Updates
Planet has lowered its annual revenue guidance and increased its expected annual loss due to the challenging macro environment. The company remains focused on achieving profitability despite these hurdles.
Astra’s shareholders have approved a plan for a reverse stock split, giving the company the option to perform a split in the range of 1-for-5 to 1-for-15.
Key Personnel Changes
David Anderman, former top lawyer at SpaceX, has joined Surf Air as the company’s Chief Legal Officer. He will work towards taking the aviation company public.
Steve Collar is stepping down as CEO of SES after more than 20 years at the satellite communications company. Ruy Pinto, the current CTO of SES, will assume the role of CEO, and the company is actively searching for a permanent successor.
Rick Baldridge is retiring from his role as Viasat’s Vice Chairman after leading the Inmarsat acquisition process. He joined Viasat in 1999 and has served in various executive positions throughout his tenure.
Terran Orbital has appointed Tony Gingiss as its COO. Gingiss brings with him extensive experience in the space industry, having previously held leadership roles at Virgin Orbit, Airbus OneWeb Satellites, and Boeing’s satellite unit.
Ron Garan, a former NASA astronaut and Air Force fighter pilot, has been named the CEO of ispace’s U.S. business. In his new role, he will lead the Japanese company’s office in Denver.
Curt Blake, the co-founder and former CEO of Spaceflight, has joined law firm Wilson Sonsini to lead a new space-focused industry group.
Kerry Wisnosky has been hired as the CEO of Quantum Space, a spacecraft transportation and services startup. This comes after his prior company, Millennium Engineering and Integration, merged with QuantiTech earlier this year.
On the Horizon
On June 18, SpaceX’s Falcon 9 will launch the Satria communications satellite from Florida.
From June 19 to 25, the Paris Air Show will take place, featuring the latest advancements in aerospace technology.
On June 21, ULA’s Delta IV Heavy will launch the NROL-68 satellite from Florida.
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