Lockheed Martin announced Thursday it will acquire small-satellite provider Terran Orbital for $450 million in a move by the defense giant to expand its space portfolio.
“Terran Orbital brings a high throughput, robotic manufacturing capacity and high-performing modular space vehicle designs,” Lockheed said in a statement. “Combined with Lockheed Martin’s record of performance and innovation, this transaction will usher in an even broader range of capabilities and value for customers.”
The company expects the deal to close by the end of the year. The announcement comes just three months after Lockheed withdrew an earlier bid to buy the company.
As part of the transaction, Lockheed will pay off Terran’s debt obligations and establish a $30 million working capital facility — a financing approach that will allow it to continue operations until the deal closes.
While Lockheed has traditionally built large satellites for national security missions, the Defense Department recently has moved toward smaller spacecraft built by firms outside of its traditional industrial base.
Terran Orbital, founded in 2013 in Boca Raton, Florida, is one of those firms. The company builds spacecraft for the Defense Department and NASA as well as Lockheed, its biggest customer. Terran provides the satellites for Lockheed’s contracts with the Space Development Agency to build missile-tracking and communication spacecraft.
Lockheed currently owns one-third of the smaller firm due to its satellite production partnership and investments it has made in Terran through its venture capital arm, Lockheed Ventures, since 2017.
In recent years, Terran has largely focused on building satellites designed to operate in low Earth orbit, about 1,200 miles above the planet’s surface. But over the last year, in response to customer demand, the firm has expanded its reach to build spacecraft destined for higher, geosynchronous orbits.
CEO Marc Bell told Defense News in March the company designed a geosynchronous satellite with a similar price point to its low Earth orbit satellites.
“We now have a solution that’s cost-effective and we can build it in mass quantity and give them what they want,” he said.
Bell said in a statement that Lockheed’s acquisition of the company will help the firm build on that growth.
“Access to Lockheed Martin’s incredible engineers and world-class facilities will only accelerate our business plan to provide low-cost, high-value solutions to our ever-growing customer base,” he said.
Courtney Albon is C4ISRNET’s space and emerging technology reporter. She has covered the U.S. military since 2012, with a focus on the Air Force and Space Force. She has reported on some of the Defense Department’s most significant acquisition, budget and policy challenges.
Author: Courtney Albon
Source: DefenseNews
