Fresh faces (12/19/22)

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In today's newsletter:💸 Two space mega-deals🚀 Space Council advisors🗓️ The (light) week ahead

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A Busy 72 Hours of Dealmaking 

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) of 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. 

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%. 

National Space Council Advisory Refresh

On Friday, the White House announced the latest group of leaders to staff a key advisory board for the National Space Council. 

Formerly known as the User’s Advisory Committee (UAC), the group will inform policy decisions and actions considered by the council. The group includes 30 representatives from the space industry, climate scientists, educators, advocacy group leaders, and end users of space technology. 

National Space Council chair Kamala Harris set three priorities for the council last year: expand the STEM workforce, address the climate crisis, and spearhead international norms and rules in space. UAC’s new membership is tailored to these goals, and includes more representation from climate research and academia than the last iteration of the committee.

Harris announced the new chair of the UAC, retired USAF General Lester Lyles, during the September council meeting. Lyles is also the chair of the NASA Advisory Council.

Only seven members of the new advisory group have already served on the committee, which had its last refresh under the Trump administration in June 2020. For the most part, these recurring members are familiar faces at the head of the space industry:

1. Lester Lyles

2. Tory Bruno, United Launch Alliance CEO

3. Gwynne Shotwell, SpaceX COO and President

4. Bob Smith, Blue Origin CEO

5. James Taiclet, Lockheed Martin CEO

6. Mandy Vaughn, former president of VOX Space

7. Kathy Warden, Northrop Grumman CEO

Read online to see the full list of new members. And share this story with someone who you'd nominate to to be on the next advisory board of the Space Council:

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In Other News

• Rocket Lab ($RKLB) stood down from Sunday’s launch due to high upper level winds at Wallops—and will make another attempt later today.

• NASA and Roscosmos are using Canada's robotic arm to investigate the Soyuz MS-22 following a coolant leak from the spacecraft.

• Danuri, South Korea’s lunar orbiter, successfully completed its first lunar orbit insertion maneuver. 

• The Senate voted 83-11 to approve the $858B fiscal year 2023 NDAA.

• A USSF senior analyst was investigated for wearing the “Borat” chartreuse mankini and other instances of unprofessional behavior—but kept his job following an investigation—per a redacted USAF OIG report obtained by the Air Force Times.

The View from Florida

SpaceX conducted three launches in ~36 hours. It launched 54 Starlink satellites at half past 4pm ET on Sunday. On Friday at 3:46am, it launched SWOT for NASA, and later at 5:48pm, it launched the 03b mPOWER mission for SES.