Lockheed Martin to purchase satellite builder Terran Orbital
Lockheed Martin today announced that it intends to purchase the satellite company Terran Orbital, of which it already owns one third of its stock.
Lockheed said Aug. 15 it would buy Terran Orbital for $0.25 per share in cash and retire the company’s existing debt. The deal, expected to close in the fourth quarter, has an enterprise value of $450 million. Shares in Terran Orbital closed Aug. 14 at $0.40.
Lockheed had six months ago offered to buy the company for $1 per share, but then withdrew the offer. It appears this new offer is intended to save the company, as Lockheed needs it. Right now 90% of Terran Orbital’s contracts are with Lockheed, and if the company goes under so do those deals.
This situation appears related to funding problems being experienced by the Rivada 300-satellite constellation. It had signed a $2.4 billion contract with Terran to build those satellites, but Terran removed that contract from its listed deals this week, suggesting that it no longer expected it to happen.
Lockheed Martin has made a strong effort in the past decade to remake itself to meet the challenges of the new space market, including entering the smallsat satellite manufacturing market. Thus it should be able to absorb Terran Orbital’s operations with little major harm to both, and much benefit.
Hat tip to BtB’s stringer Jay.
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Lockheed Martin today announced that it intends to purchase the satellite company Terran Orbital, of which it already owns one third of its stock.
Lockheed said Aug. 15 it would buy Terran Orbital for $0.25 per share in cash and retire the company’s existing debt. The deal, expected to close in the fourth quarter, has an enterprise value of $450 million. Shares in Terran Orbital closed Aug. 14 at $0.40.
Lockheed had six months ago offered to buy the company for $1 per share, but then withdrew the offer. It appears this new offer is intended to save the company, as Lockheed needs it. Right now 90% of Terran Orbital’s contracts are with Lockheed, and if the company goes under so do those deals.
This situation appears related to funding problems being experienced by the Rivada 300-satellite constellation. It had signed a $2.4 billion contract with Terran to build those satellites, but Terran removed that contract from its listed deals this week, suggesting that it no longer expected it to happen.
Lockheed Martin has made a strong effort in the past decade to remake itself to meet the challenges of the new space market, including entering the smallsat satellite manufacturing market. Thus it should be able to absorb Terran Orbital’s operations with little major harm to both, and much benefit.
Hat tip to BtB’s stringer Jay.
Readers!
Please consider supporting my work here at Behind the Black. Your support allows me the freedom and ability to analyze objectively the ongoing renaissance in space, as well as the cultural changes -- for good or ill -- that are happening across America. Fourteen years ago I wrote that SLS and Orion were a bad ideas, a waste of money, would be years behind schedule, and better replaced by commercial private enterprise. Only now does it appear that Washington might finally recognize this reality.
In 2020 when the world panicked over COVID I wrote that the panic was unnecessary, that the virus was apparently simply a variation of the flu, that masks were not simply pointless but if worn incorrectly were a health threat, that the lockdowns were a disaster and did nothing to stop the spread of COVID. Only in the past year have some of our so-called experts in the health field have begun to recognize these facts.
Your help allows me to do this kind of intelligent analysis. I take no advertising or sponsors, so my reporting isn't influenced by donations by established space or drug companies. Instead, I rely entirely on donations and subscriptions from my readers, which gives me the freedom to write what I think, unencumbered by outside influences.
You can support me either by giving a one-time contribution or a regular subscription. There are four ways of doing so:
1. Zelle: This is the only internet method that charges no fees. All you have to do is use the Zelle link at your internet bank and give my name and email address (zimmerman at nasw dot org). What you donate is what I get.
2. Patreon: Go to my website there and pick one of five monthly subscription amounts, or by making a one-time donation.
3. A Paypal Donation or subscription:
4. Donate by check, payable to Robert Zimmerman and mailed to
Behind The Black
c/o Robert Zimmerman
P.O.Box 1262
Cortaro, AZ 85652
You can also support me by buying one of my books, as noted in the boxes interspersed throughout the webpage or shown in the menu above.
The whole Rivada situation is causing a lot of issues. Terran Orbital had that on the books for some time without substantial payment. I wonder if Lockheed will be a bit more aggressive in getting the contracts paid for or implement a separation fee to end them. I hope the TO people will still have their jibs when all this is over.
I wonder if Lockheed tries to back out of this verbal agreement because the stock price dropped below their offer by 60%?
And if they do will the courts force them to pay the agreed price like they did to Musk with X?