Lockheed Martin to Acquire Terran Orbital in $450 Million Take-Private Deal
Lockheed Martin is making a strategic move to save satellite manufacturer Terran Orbital from financial troubles in a $450 million take-private deal set to close by the end of the year. The defense giant will purchase Terran for $0.25 per share and clear its existing debt, with Lockheed already holding a 28.3% stake in the company. This acquisition marks Lockheed Martin's first from its investment arm, Lockheed Martin Ventures, since its establishment in 2007. Satellite bus contracts from Lockheed make up a significant portion of Terran's revenue and backlog.
Terran Orbital received a significant boost earlier in 2023 with a $2.4 billion deal for 300 satellites from Rivada Space Networks. However, delays in payments from Rivada led Terran to remove the deal from its backlog. Lockheed's initial bid for Terran was over $500 million, but was met with resistance in the form of a stockholder rights plan. Despite a decrease in cash reserves, Terran is now set to be acquired by Lockheed in this revised deal.
As of market close, Terran Orbital's stock price was $0.40 per share, making it the second space company to exit the public markets after entering with billion-dollar valuations. Astra Space, another company that recently finalized a take-private deal, also experienced a similar trajectory. Both companies initially entered the public market with high valuations, only to be acquired for a fraction of those amounts in private deals.
In conclusion, Lockheed Martin's acquisition of Terran Orbital highlights the challenges faced by space companies in the current market environment. This deal underscores the importance of strategic investments and the impact of financial decisions on both companies and investors. It serves as a reminder of the ever-changing nature of the financial landscape and the need for careful consideration in navigating investment opportunities.