Gone hunting (10/6/2022)

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In today's newsletter:⚡ AEI’s busy week🚀 Crew-5 highlights📝 The contract report

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Another Notch in AEI's Belt

AE Industrial Partners (AEI) announced on Tuesday that it plans to acquire a majority stake in satellite systems provider York Space Systems. 

According to a report by CNBC, AEI acquired a 51% stake in a deal that values York at $1.125B, making it the next space “unicorn.” AEI declined to comment on the terms of the deal.

AEI 101: The private equity firm has a long history of investing in aerospace. It currently holds sizable stakes in big players like Virgin Orbit, Sierra, and Firefly. 

• In late 2020, AEI created Redwire by merging Adcole Space and Deep Space Systems. 

• This week, Redwire also agreed to acquire a company. All this AEI-associated M&A activity is giving us Russian nesting doll vibes. 

It’s been a busy week for AEI 

On Saturday, Firefly successfully sent its Alpha to the black on only its second try. “The team at Firefly has been through a lot over the last few years, especially over the last 12 months,” AEI partner Kirk Konert told Payload. “To really see their hard work come to fruition with that launch…is pretty, pretty special.”

• Firefly is targeting six flights in 2023, then a monthly cadence in 2024.

• A weekly launch cadence is “far out,” Konert said, but remains the north star.

Just a few days after Firefly’s launch, AEI announced the York deal.

“We believe it's a once-in-a-generation opportunity to invest in the space sector,” Konert said. “We want to find the best opportunities to invest in that sector. York, from our perspective, is the best opportunity in small spacecraft right now.”

York Space Systems

The Denver company is bucking the tradition of building bespoke satellite systems for each mission. 

Once a satellite bus is built, York “can then integrate whatever payloads [are] needed for the particular mission, whereas historically, every new mission required a new engineering of an entire spacecraft,” Konert said. “We don't need to do that.”

By using similar techniques as those used in jet engine production lines, Konert said, York has positioned itself well to scale up mass production of its small satellite buses. York’s two Denver facilities boast 165,000 sq. ft. of space and the capacity to make 750+ buses a year. 

The company is not currently manufacturing to that capacity, Konert said, but plans to scale up production with the influx in capital brought on by AEI’s acquisition.

AEI sees York systems as “a much, much cheaper, better alternative than its competitors are now,” Konert said.

York has a backlog of over $1B in orders, including a $382M contract from the Space Development Agency (SDA) to supply 42 satellites for the Transport Layer Tranche 1. Under the same contract, Lockheed Martin and Northrop Grumman are providing the same number of satellites for $700M and $692M, respectively. 

“It's a cost differential,” Konert said. “York provides the same spacecraft that our competitors can provide at half the cost. That's a pretty compelling proposition to the customer.” York also has a $94M contract with the SDA to provide 10 satellites for Tranche 0, which is expected to launch early next year.

Looking forward…Besides scaling up manufacturing, York is planning to leverage its new relationship with AEI to build its network at the DoD. The company is positioning itself as the go-to manufacturer for proliferated systems in LEO.

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Milestones for Days

SpaceX launched four astronauts to the ISS aboard its Crew-5 mission with NASA yesterday. The Dragon Endurance spacecraft is expected to dock with the space station today around 5pm ET.

This mission had many, many milestones. 

First up, geopolitics. All signs point to collaboration in space, for now. The crew includes Roscosmos cosmonaut Anna Kikina, the first Russian to fly on an American vehicle since Nov. 2002, before the Columbia tragedy in 2003. Kikina was also the first to fly on a US mission after the July seat swap between NASA and Roscosmos. 

In NASA’s post-launch briefing, Sergei Krikalev, Roscosmos' head of human space programs, said the Crew-5 mission kicked off “a new phase of our cooperation." The two nations began cooperating in space over 40 years ago, Krikalev said, “and we will continue our cooperation as long as I can imagine." 

Next, cultural firsts. Crew-5’s Nicole Mann not only became the first Native American woman to go to space, but also served as SpaceX’s first woman mission commander. She notably brought a dreamcatcher on board to honor her heritage. John Herrington became the first Native American in space in 2002. 

Last but not least, SpaceX records. The Crew-5 mission is SpaceX’s fifth commercial crew mission to the ISS with NASA, and the sixth SpaceX flight with NASA astronauts on board. Crew-5 also marks SpaceX’s eighth human spaceflight in a little over two years. It all happened so fast. Spacex has now launched 30 people to space. Broken out by nationality: 

• 70% American 

• 10% Japanese

• 20% Everywhere Else (one Russian, one Israeli, one Canadian, one German, one French, one Italian)

Looking ahead to Crew-6 and Ax-2. Scheduled for Feb. 2023, Crew-6 will carry two NASA astronauts, an Emirati astronaut, and a cosmonaut to the ISS. After a successful first go, Axiom Space’s second commercial mission to the ISS, Ax-2, will include two Saudi Arabian astronauts, including the first Saudi woman to go to space. Axiom has emerged as a space station-as-a-service provider—it also recently brokered a mission with Turkey to fly an astronaut to the ISS. 

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In Other News

• SpaceX launched Crew-5 and a Starlink mission within ~seven hours. Its next launch, with Intelsat’s G-33 and -34 satellites, is set to lift off is sat 7:07pm Eastern tonight.

• AST SpaceMobile ($ASTS) plans to unfold BlueWalker 3 in the back half of October. 

• Virgin Orbit ($VORB) completed a full launch rehearsal. Cosmic Girl and the latest LauncherOne are ready to fly and are awaiting next steps on the permitting front.

• Falcon Heavy could launch as soon as Oct. 28.

The View from Space

Hubble and the Chandra X-ray Observatory observed the remnants of a supernova in a galaxy 160,000 light years away. Researchers created this image of the debris cloud by combining imagery from both telescopes.