EOEquitiesLaunch

Maxar, Aerojet Rocketdyne Agree to $6.4B and $4.7B Takeovers

Maxar WorldView legion render
Image: Maxar

On Friday morning, the markets woke up to quite a surprise: A PE firm was taking Maxar ($MAXR) private in a mega-deal worth $6.4B. Then, we saw a monster merger confirmed Sunday evening, with L3Harris ($LHX) agreeing to buy Aerojet Rocketdyne ($AJRD).

$MAXR take-private 

Maxar’s board voted unanimously to enter into a definitive merger agreement with Advent International, a Boston-based private equity group with $89B AUM. It’s one of the largest leveraged buyouts (LBOs) in the last few months. 

Deal terms: Advent will purchase all outstanding shares of common stock for $53/share, a 129% premium over Maxar’s closing price on Dec. 15. The deal includes a 60-day “go-shop” period that ends on the last minute of Valentine’s Day. During those 60 days, Maxar management can solicit takeover bids from other third parties. In the unlikely scenario a better deal is found, then Maxar has the option to nix the Advent arrangement and take the other offer. 

The view from Westminster, CO: Since Advent is paying in cash, Maxar can shed its $2B+ debt load and focus on deploying its delayed, next-gen WorldView Legion constellation without the short-termism and scrutiny that comes with being public. Advent can also use Maxar as a platform investment, from which it can make bolt-on acquisitions with additional EO technologies, satellite operators, and collection capabilities.  

$AJRD finds a new home

L3Harris will buy Aerojet at a purchase price of $58/share, implying a transaction value of $4.7B (including debt). Aerojet makes liquid- and solid-fueled propulsion products for major space players and missile makers. Its key space programs include the SLS’s RS-25 engines, the Orion spacecraft’s main engine, the RL-10, and in-space electric propulsion products. 

Multiple bidders had been interested in the El Segundo, CA company. 

  • Earlier this year, the FTC blocked a $4.4B takeover bid from Lockheed Martin ($LMT), saying the merger could inflate the cost of rocket engines for other contractors or even lock out their access to the supplier.
  • A few weeks ago, Reuters reported that US industrial conglomerate GE was in the running to acquire Aerojet. 
  • Aerojet also faced boardroom drama in recent months. 

Historical backdrop: While L3Harris and Aerojet were quick to tout the deal as a win for the competitive landscape, the US defense industrial base has seen decades of consolidation

Defense conslidation
Image: Commission on the Future of the United Space Aerospace Industry

One example? In 1950, the US had five major solid rocket motor producers. By the 2010s, there were just two: Orbital ATK and Aerojet Rocketdyne. Orbital ATK was snapped up by Northrop Grumman ($NOC) in 2018, and by mid-2023, it seems that Aerojet Rocketdyne will be part of L3Harris. 

Key #s, at a glance: Aerojet made nearly $2.2B in 2021. In a Dec. 18 deck, the company said it expects that number to grow to $2.5B in 2024. It has 5,000+ employees, ~30% of which are engineers, and touts 14 “strategically placed facilities” across the country. 

+ Stock pulse check: Shares of $AJRD were up 2% in premarket trading, while $LHX was off by 1.7%. 

Related Stories
EOInternational

Europe’s New Spacecraft to Map World’s Forests in 3D

Europe will launch a satellite to map the world’s forests in 3D, to hunt down illegal logging and track climate change by mapping how forests store carbon.

EquitiesPolicySatcom

Iridium Is Fighting Starlink and Trump’s Tariffs

Despite beating market expectations with first quarter revenue growth of 5% year-on-year, Iridium’s stock fell nearly 7% in the face of competition and trade wars.

LaunchMilitary

NRO Launches First Payload Under New NatSec Contract

The NROL-145 launch is the first under the Space Force’s Phase 3 Lane 1 rubric—a launch contracting mechanism that will spend $5.6B on relatively simple launches with fewer requirements, which might suit new entrants to the national security launch game. 

BusinessLaunchTechnology

Phantom Space and Ubotica Team Up to Bring AI to Orbit

The volume of data being gathered in space is growing exponentially, and the capacity to ship that data back to Earth is increasingly constrained. That’s why more companies want to analyze their data on orbit. Phantom Space is no different.