Lockheed Martin to buy satellite products maker

Lockheed Martin LMT.N on Thursday agreed to acquire satellite products maker Terran Orbital LLAP.N in a US$450 million deal, months after the defence contractor withdrew its previous bid to take it private.

Lockheed will pay US25 cents per share in cash, representing a 37.5 per cent discount to Terran’s last close. The company in March had offered US$1 per Terran share.

Terran’s shares plunged nearly 41 per cent to 24 cents on the New York Stock Exchange.

Lockheed, which had invested in Terran’s Series A round in 2017, is its largest customer and currently uses the company’s satellite bus for the U.S. Space Development Agency’s (SDA) transport and tracking layer programs.

“The acquisition consolidates a supplier, with Terran Orbital providing buses for Lockheed’s prime position on the SDA’s Tracking and Transport layer,” analysts said in a Jefferies note.

Florida-based Terran Orbital is engaged in satellite design, production, launch planning, mission operations, and on-orbit support for aerospace and defence clients.

The transaction, which is expected to close in the fourth quarter, will retire Terran’s existing debt and establish a new US$30 million working capital facility.

A month back, Terran posted quarterly net loss of US$35.4 million, adding to several quarters of losses since going public in 2022.

Earlier this year, Lockheed was awarded US$890 million as part of a US$2.55 billion contract along with peers L3Harris Technologies LHX.N and Sierra Space to deliver 18 satellites to the SDA as part of its missile tracking program.

(Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Maju Samuel)