Firefly Aerospace buys defense contractor SciTec
Firefly Aerospace yesterday announced that it is buying the defense contractor SciTec for $300 million in cash plus $555 million in Firefly shares.
The shares go to SciTec’s owners at an agreed-to value of $50 per share, essentially making those individuals part owners of Firefly.
The acquisition will advance Firefly’s comprehensive space services by adding mission-proven defense software analytics, remote sensing, and multi-phenomenology data expertise. SciTec’s core capabilities – which include missile warning, tracking and defense, intelligence, surveillance and reconnaissance, space domain awareness, and autonomous command and control – will supplement Firefly’s launch, lunar, and in-space services. SciTec further adds ground and onboard data processing as well as AI-enabled systems designed for low latency operations to support advanced threat tracking and response across multiple domains.
In other words, this acquisition is aimed at improving Firefly’s ability to win defense contracts, thus diversifying its business beyond outer space. This suggests its managers believe there isn’t enough business in outer space to put the company in the black. It needs defense contracts, and adding SciTech increases the odds it will win those contracts.
The stock price in this sale, $50, I think tells us something of the motives of SciTec’s owners. At present Firefly’s stock is selling at about $30 on Wall Street, and the price has not changed much today after this announcement. It appears the stock obtained by SciTec’s owners is thus not as valuable as listed in the intended sale price. This in turn suggests that those owners also needed this deal to diversify the company, and were willing to take a loss in the value of their stock to get it.
Then again, my understanding of how Wall Street and stocks function is limited, and my analysis on this point could be completely wrong.
Firefly Aerospace yesterday announced that it is buying the defense contractor SciTec for $300 million in cash plus $555 million in Firefly shares.
The shares go to SciTec’s owners at an agreed-to value of $50 per share, essentially making those individuals part owners of Firefly.
The acquisition will advance Firefly’s comprehensive space services by adding mission-proven defense software analytics, remote sensing, and multi-phenomenology data expertise. SciTec’s core capabilities – which include missile warning, tracking and defense, intelligence, surveillance and reconnaissance, space domain awareness, and autonomous command and control – will supplement Firefly’s launch, lunar, and in-space services. SciTec further adds ground and onboard data processing as well as AI-enabled systems designed for low latency operations to support advanced threat tracking and response across multiple domains.
In other words, this acquisition is aimed at improving Firefly’s ability to win defense contracts, thus diversifying its business beyond outer space. This suggests its managers believe there isn’t enough business in outer space to put the company in the black. It needs defense contracts, and adding SciTech increases the odds it will win those contracts.
The stock price in this sale, $50, I think tells us something of the motives of SciTec’s owners. At present Firefly’s stock is selling at about $30 on Wall Street, and the price has not changed much today after this announcement. It appears the stock obtained by SciTec’s owners is thus not as valuable as listed in the intended sale price. This in turn suggests that those owners also needed this deal to diversify the company, and were willing to take a loss in the value of their stock to get it.
Then again, my understanding of how Wall Street and stocks function is limited, and my analysis on this point could be completely wrong.