United Launch Alliance, a joint venture formed in 2006, may soon have a new corporate home. That’s because co-owners Boeing ($BA) and Lockheed Martin ($LMT) are reportedly putting ULA up for sale, according to a blockbuster story last week from Ars Technica’s Eric Berger.
Morgan Stanley and Bain were hired to facilitate the transaction, which is reportedly expected to close before the year is out.
ULA is eyeing May 4 for the maiden launch of its new rocket—which is an absolutely electric coincidence for Star Wars nerds everywhere. That rocket, the Vulcan Centaur, will fly Astrobotic’s Peregrine lander as its primary passenger, with Amazon’s Kuipersat-1 and -2 hitching a ride as well.
Here’s where Payload readers come in…
They’re a smart, space-savvy bunch. So, we wanted to hear fromt hem. Assuming ULA is sold, who will the mystery buyer end up being? Berger laid out a range of theoretical buyers in his story breaking the news, as did SSL’s Abhi Tripathi in a Twitter poll. Payload drew inspiration from both.
In Thursday and Friday’s newsletters, Payload polled 16,000+ readers and asked them to predict who will buy United Launch Alliance (with the obvious caveat that ULA will indeed be sold). The options were as follows:
- Boeing buyout of Lockheed’s stake
- Lockheed buyout of Boeing’s stake
- Another big contractor (Northrop, L3Harris, etc…)
- A private equity shop (any PE firm will do)
- Jeff Bezos company #1 (Amazon)
- Bezos company #2 (Blue Origin)
- Wild card Fortune 500 player
- Other (write in with your response)
It was a strong showing, with ~2.2% of all Payload readers casting a vote. Considering only those who opened Thursday and Friday’s newsletters, ~4.2% of readers responded. More than 30 readers wrote in with additional thoughts, which we’ll highlight below.
First, let’s start with the high-level results.
Blue Origin ultimately came away as the favorite, with 23.5% of the vote. A Lockheed buyout of Boeing was the runner-up, finishing with just two fewer votes and being overtaken by Blue Origin late on Friday. Private equity took bronze with 16.7% of the vote.
A ULA sale: what you’re thinking
Write-in answers were thought-provoking, with a few funny and ludicrous comments added into the mix for good measure. We had 978 words of free-form answers to trawl through. We read everything and didn’t want to keep the goods to ourselves. Find the good, the bad, and the funny below.
A few readers wrote in with something to the effect of “Northrop is the dark-horse candidate.” A few jokesters wrote that ULA will SPAC (or maybe they weren’t joking). One person thinks BAE will buy ULA to build a US space beachhead. A couple readers believe Rocket Lab and a PE shop will do a leveraged buyout. And someone else thinks Sierra will swoop in to acquire launch assets that round out the Dream Chaser spaceplane.
One common throughline: Boeing is in a tough situation, strategically and financially. The Washington company may be looking to pare losses from space programs and downsize aerospace exposure. Boeing could do both by swapping a valuable launch asset for cash.
By the same token, aerospace and defense (A&D) contractors purchasing ULA outright may be a non-starter from an anticompetitive lens. In Washington, lawmakers and the Pentagon have voiced concerns about defense industrial base consolidation.
Lockheed Martin buys Boeing's ULA stake
- “With their legacy history of Atlas and Titan, and Atlas V EELV, it would hard, and sad, to see LM out of the launch business.”
- “This makes more sense for Lockheed to buy out Boeing from a product rationalization standpoint. Lockheed Martin's recent failed acquisition of Aerojet created synergies and a team of individuals looking to copy/paste their work and can apply to ULA acquisition.”
- “Lockheed has been itching to expand its presence in space. With the falling out of the Aerojet Rocketdyne merger and recent investment in Terran Orbital, Lockheed has money to spend and a reason to launch their own rockets.”
Thoughts on Blue Origin or Amazon buying ULA
- “I don’t see Amazon going through such an investment after throwing billions for Blue & with Ariane.”
- “Bezos wants to pass the orbit milestone, and this is the fastest way.”
- “Not sure what Blue or Amazon gain from owning ULA, but maybe an acqui-hire that also gets you national security launch credibility as you develop New Glenn.”
- "DOD will never let Bezos and Musk control their capability to launch assets. DOD is already not totally happy that ULA booked the Kuiper business and would not want to lose control on Vulcan which was designed with them in mind."
- “I still think the rumor that Bezos wants [ULA CEO Tory] Bruno to run Blue Origin might happen when ULA is sold.”
- “Tory as Blue ceo??????????”
- “BlueLA all the way!”
The private equity play for ULA
- “ULA is a perfect and almost easy PE play since simply getting it out from under its parents creates significant new value.”
- “Feels like even odds for other contractors or private equity. Space launch is not generally speaking massively profitable, especially with SpaceX being SpaceX, so another contractor doing a tech or contracts acquisition could make some sense, or a private equity firm that doesn't fully understand the margins yet but sees (correctly) competitive opportunity and possible profit from space launch could make a move here.”
A Fortune 500 wild card
One reader, we suspect facetiously, thinks John Deere is the mystery buyer.
Another reader noted that “Microsoft has around $100B cash reserves [and] Apple has twice that. I’d guess one of those guys would like to make sure they are not beholden to SpaceX’s Starlink for future connectivity.”
Payload's asking the wrong question
“There's NO SINGLE BUYER. Once the analysis is complete, the conclusion will find that the liabilities of an expendable launch system are too great to compete with reusable launch systems.
However, the elements—like location real estate, facilities, test, manufacturing, comms & tracking & PNT, etc.—are individually valuable [and] will be bundled and auctioned separately to many specialist bidders."
Honorable mentions...you're saying there's a chance?
The buyer, one respondent wrote, will end up being “a billionaire who wants to be a millionaire.”
Alternatively, one reader has seen the future: “the milk industry tries to stake its claim in the space sector by acquiring ULA and rebranding as Udder Liquid Aerospace.”
Finally, one reader confidently observed that the mystery buyer is “someone not named SpaceX.” That feels like an answer that we can all get behind?