Lockheed Martin to take Terran Orbital private in $450 million deal – MASHAHER

ISLAM GAMAL15 August 2024Last Update :
Lockheed Martin to take Terran Orbital private in $450 million deal – MASHAHER


Terran Orbital’s banner above the New York Stock Exchange on March 28, 2022.

Terran Orbital

Lockheed Martin is buying Terran Orbital, the company announced Thursday, with the defense giant reaching a deal to take the struggling spacecraft manufacturer private.

The agreement will see Lockheed acquire Terran at an enterprise valuation of nearly $450 million, below Lockheeed’s previous bid of nearly $600 million in March.

Lockheed would acquire Terran Orbital’s outstanding common stock at 25 cents a share in cash. Additionally, Lockheed will pay off Terran’s debt and established a $30 million capital facility to keep the company going while the deal closes.

Terran’s stock closed at 40 cents a share on Wednesday.

Expected to close in the fourth quarter, the deal would help Terran dodge a cash-and-debt cliff that the company is staring down. Terran’s cash reserves were less than $15 million at the end of July, it reported in a filing on Monday, and it also has about $300 million in debt.

Read more CNBC space news

The small spacecraft maker went public via a special purpose acquisition company in early 2022 at a $1.8 billion valuation. Like several other space stocks that debuted in the past few years, the yet-unprofitable company has been hit hard by the shifting risk environment in the market.

Lockheed Martin is already a significant stakeholder in Terran Orbital, having bought in during the company’s SPAC process and again in late 2022. Lockheed Martin is also an important customer for Terran, making up 70% of Terran’s $30.4 million in revenue during the second quarter.

Terran signed a blockbuster spacecraft production contract 18 months ago from prospective satellite communications operator Rivada Space Networks, worth $2.4 billion for 300 satellites. But the deal has yet to drive meaningful funds for Terran, which reported that it recognized just $6.2 million from the Rivada agreement in the first half of this year.

On Monday, Terran said it was removing the Rivada deal from its total contract backlog — which reduced the backlog of orders by 88%, from $2.7 billion to $312.7 million. Of its non-Rivada orders, 91% of Terran’s contracts are “programs associated with Lockheed Martin.”


Source Agencies

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