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A for sale sign hangs in front of a home for sale in Greenebras, California.
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Overview: Mergers and acquisitions are in the works
The space sector has seen a variety of mergers and acquisitions since the start of the year, but dealmaking is still heating up.
This week I spoke to bankers, private equity partners, and investors to get a candid health check of M&A activity in the industry, and the consensus was fairly unanimous. As one financier put it: “The dominoes are starting to fall.”
This is a normal market cycle, said a second financier, and the pendulum is swinging towards a change: ‘A lot of those weaker companies are failing, there’s a lot of consolidation.’
A third said, “We are early in the process of estimating actual demand versus hype.”
Absent sudden and unexpected swings in macroeconomic conditions, most people I’ve spoken to expect a period of sell-off or bust-up for the next 12 months. CNBC agreed to keep their identities anonymous so they could speak freely about discussions and non-public sentiments.
Another financier said: “A lot of these startups that have been around for the last few years are going to see the wall in front of them and probably sell before then.”
At the top of the M&A market, several bankers tell me United Launch Alliance — their joint venture Lockheed Martin And Boeing — still being shopped around, reportedly, during giant packaging ball Looking to sell its aviation subsidiary. ULA referred my request for comment on the sale to Boeing and Lockheed. A Ball Aerospace spokesperson declined to comment.
Meanwhile, one financier tells me that even Boeing is exploring options for its space business, and “everything is on the table.” The person, who was familiar with the conversations, told me that no “hard decisions” have been made yet about what the company might do with its space portfolio, but could potentially give up or sell its satellite manufacturing unit. Boeing did not respond to my request for comment.
An important nuance emphasized by many during my conversations: These deals, whether worth millions or billions, are not all equal. The underlying markets and technologies for space companies are often very different, and the reasons for one company’s sale or failure are often very different from those of another.
Likewise for buyers, who may be after a deal because they’re seeking a deep discount, looking to quickly add talent in a key area, add complementary services or technology, or any number of other incentives.
One person told me, “This is an amazing opportunity…if you’ve been doing all the hard work thru the market craziness and you’re building a business on sound unit economics…it’s time to move.” “You can really clean up.”
what’s up
- Ursa Major and Orbit Fab lay off workers, as the Colorado pair adjust to the new normal of a tight funding environment. Ursa Major has been particularly hard hit, shedding about 27% of its staff. – CNBC
- Space Force assigns 12 missions to SpaceX and ULA: Under the previously awarded NSSL Phase II contract, each company was given six assignments. SpaceX missions average $90.2 million per launch, while ULA averages $105.5 million per launch. – Read more
- Vulcan’s ULA debut likely falls into the fourth quarter: The company is making modifications to the upper stage of the rocket after an explosion during a test in March. – Ars Technica
- SpaceX is launching missions 40 and 41 this year, Including the Transporter-8 rideshare mission that carried 72 satellites for multiple companies. The mission also marks the company’s 200th successful orbital booster rocket landing. – Read more
- Stoke Space Test Rocket Direction Control, With the company continuing to pursue a method of developing a fully reusable rocket. – goods
industry maneuvers
- SAIC was awarded a $64 million contract by the Pentagon’s Space Development Agency, to develop and maintain an in-orbit virtual “factory” for software applications for the SDA constellation. – Space news
- black sky I won a contract of more than 30 million dollars, To provide satellite imagery services to an unnamed international military agent for several years. – black sky
- NASA awards SpaceX the satellite cube launch contract, for the company to launch four of the agency’s cubes no later than 2025 on a Falcon 9 rocket. – NASA
- Tomorrow.io brings in $87 million To build the constellation of weather and climate satellites, in a round led by Activate Capital and joined by RTX Ventures, Seraphim Space, Chemonics, SquarePeg Capital, Canaan, ClearVision, JetBlue Ventures, and Pitango. – Space news
market drivers
- planet Reduces annual revenue guidance. It also raised its expectations for the expected annual losses, as the company announced the results of the first quarter of the fiscal year. Planet’s CFO and COO Ashley Johnson emphasized the “challenging macro environment” and said the company remains “focused on the path to profitability.” – CNBC
- Astra Shareholders agree to a plan for a reverse stock splitgiving the company the option to perform a split in a range from 1 vs 5 to 1 vs 15. – Astra
boldly go
- David Anderman has joined Surf Air, as SpaceX’s former chief attorney seeks help in bringing the airline public as its legal chief. – CNBC
- Steve Kohler has stepped down as CEO of SES, after more than 20 years at the Luxembourg-based satellite communications company. At the end of June, SES CTO Ruy Pinto will take over the CEO role, as the company searches for a permanent successor. – SES
- Rick Baldridge is retiring from the role viasat Deputy Chairman of the BoardAfter leading the acquisition of Inmarsat. Baldridge joined Viasat in 1999, holding positions including COO and CEO. – viasat
- Tony Jenges joins Terrain Orbital as Operations Manager, having previously served as COO at Virgin Orbit, with previous leadership roles at Airbus OneWeb Satellites as well as Boeing’s satellite unit. – Terrain Orbital
- Ron Garan has been appointed CEO of the American business company ispace: Garan, who flew as a NASA astronaut on the space shuttle and was formerly a fighter pilot in the Air Force, will lead the Japanese company’s office in Denver. – ispace
- Curt Blake joins the law firm of Wilson Sonsini, to lead a new aerospace-focused industrial group. Blake was the co-founder and CEO of Spaceflight, which was recently acquired by Firefly Aerospace. – Wilson Sonsini
- Appointed Kerry Wisnowski as CEO of Quantum Spaceand joined the space transportation and services company, with his former company Millennium Engineering and Integration merging with QuantiTech in 2021. – quantum space
In sight
- June 18: SpaceX’s Falcon 9 launches Satria Communications Satellite of Florida.
- June 19-25: Paris Air Show
- June 21: Delta IV Heavy is launched from ULA NROL-68 satellite from Florida.
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