Lockheed Martin increases stake in Terran Orbital and invests $100 million to expand small-scale production | So Good News

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Terran Orbital has canceled plans to expand capacity in California and build a large facility on Florida’s Space Coast.

WASHINGTON — Lockheed Martin is raising its stake in small satellite maker Terran Orbital with a $100 million investment. This increased its total shareholding from 9.4% to 33.5%.

Terran Orbital announced the new investment on October 31st. Lockheed Martin has invested in the company. Since 2017 and selected. To produce Made 42 satellites. under the US Space Force’s Space Development Agency; $700 million contract.

Headquartered in Boca Raton, Florida, Terran Orbital is headquartered in Boca Raton, California. Plans to use the new funds to expand satellite manufacturing facilities in Irvine have been scrapped. They are planning to build large factories. Florida’s Space Coast partners with Space Florida.

“It makes sense for us right now because there is immediate demand for satellites,” said Marc Bell, co-founder and CEO of Terran Orbital. Space news. He said building an assembly line in Florida is estimated to take three years, while the expansion in Irvine will take just 12 months. “It’s easier to add to it than to try to expand on another coast.”

The Terran Orbital is moving away from the plans to build it. Constellation 96 composite aperture radar satellites called PredaSAR. The company will continue to manufacture SAR satellites and sell them to customers, avoiding the risk and expense of building its own constellation. “We want to focus on manufacturing, not on being a satellite operator,” Bell said.

He said the move was prompted by Russia’s invasion of Ukraine and a sudden increase in demand for SAR satellites. “So I think the best course of action for us in the long term is to sell satellites to governments or commercial operators,” Bell said.

Since the conflict began, several companies and government organizations have inquired about buying the satellites, Bell said. Therefore, buses, He added that it became clear that selling the hardware, including service fees and parts, was the way to go. “The SAR constellation, like any constellation, is capital intensive. So this de-risks the company going forward from a capital standpoint.”

Executives concluded that Terran Orbital’s market value was being dragged down after PredaSAR learned of its recent acquisition of rival York Space. A private equity firm York’s market value is $1.12 billion, or 3 times the value of Terran Orbital.

“We’re a lot bigger than York and we’re trading at a fraction of York’s valuation,” Bell said. “So there’s a big disconnect between us and them, and we think the constellation is a big drag on our value.”

Irvine plant. More than the capacity to produce 250 satellites per year. YorkHe said.

Bell said the revised strategy should boost Terran Orbital’s share price, which was above $11 when the company launched. It was trading at less than $3, in part, after trading on the New York Stock Exchange as a public SPAC merger. A broader market decline in the What about SPACs?

“The market wanted us to do something different,” Bell said. “So we will focus on our core business, which is manufacturing, which is capital volatile and has very low risk.”

Austin Moeller, aerospace and defense analyst at investment bank Canaccord Genuity; Written on October 31st in Terran Orbital’s research note. Lockheed’s investment will increase in value. “It’s clear that Lockheed is trying to do more than just dip its toes in the water in the micromanufacturing space because of the significant TAM. [total addressable market] exquisite “Opportunity for Smaller Metals Related to GEO Satellites.”

According to Moeller, “Considering that York has only built 13 satellites in the past decade (as opposed to 70+ for Terran), we continue to see a disconnect between LLAP’s current valuation. [Terran Orbital] (~$350M market cap) and peers like York, which sold at 3.2 times this valuation to private equity.”

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