Sponsored by SPX CommTech (TCI & ECS)
www.tcibr.com
www.enterprisecontrol.co.uk
————————————————————————-
12 Oct 23. Stellant Systems, Inc. to Acquire Power Systems Technology Product Line from Comtech. Stellant Systems, Inc. (Stellant) and Comtech Telecommunications Corp. (NASDAQ: CMTL) (Comtech) today announced the companies entered into a definitive agreement under which Stellant will acquire Comtech’s Power Systems Technology (PST) product line for a total cash purchase price of $40m, which includes a preliminary sales price of $35m and contingent consideration up to $5m based on the achievement of certain targets. The transaction was unanimously approved by the board of directors of both companies. Stellant is a portfolio company of Arlington Capital Partners (Arlington), a Washington-D.C. based private equity firm with extensive experience investing in regulated industries.
The acquisition of the PST product line will strengthen Stellant’s portfolio of RF amplification products. PST’s rich heritage brings a differentiated set of technologies in the solid-state power amplification market, a talented work force and an almost entirely complimentary customer set to Stellant. Driving further innovation in solid state technology is a core principle of Stellant’s strategic vision to provide customers with best-in-class options across all amplification approaches, including vacuum tube and solid state.
Paul Russell, Chief Executive Officer of Stellant, said, “We are excited about the products and technology that PST brings to Stellant and look forward to investing in its technologies and employees to bring additional value to our customers. This partnership represents an important step in Stellant’s strategic vision and is another milestone in the Company’s 90-year history of technological innovations.”
Peter Manos, a Managing Partner at Arlington Capital Partners, added “PST’s market leading frequency and power capabilities with Gallium Nitride solid state power amplification combined with Stellant’s dominant frequency and power capabilities with travelling-wave tube power amplification creates, in our view, the technology leader in the market.”
“This decision is well aligned with our long-term vision for Comtech, and we are thrilled that our PST product line and associated team will have a tremendous opportunity to grow as part of Stellant,” said Ken Peterman, President, and CEO, Comtech. “We intend to use the net proceeds from this transaction to meaningfully reduce our outstanding debt, de-lever the balance sheet, reduce cash interest requirements, and provide flexibility to achieve our near-term strategic goals.”
The transaction is expected to close by the end of October 2023, subject to regulatory approvals and customary closing conditions.
Kirkland & Ellis LLP served as legal counsel to Stellant Systems and Arlington Capital Partners. Evercore served as financial advisor and Morgan Lewis as legal counsel to Comtech.
About Stellant Systems, Inc.
Stellant Systems is a premier manufacturer of critical spectrum and RF power amplification systems to the space, defense, medical, science and industrial markets for both domestic and international customers. Stellant has three domestic manufacturing facilities and nearly 1000 employees. For more information, visit www.Stellantsystems.com.
09 Oct 23. Operational Solutions Acquires Nexus Nine for Enhanced C-UAS. Operational Solutions Ltd (OSL), is proud to announce the successful acquisition of Nexus Nine Ltd, a leading provider of advanced Uncrewed Aircraft System (UAS) testing and evaluation services. This strategic acquisition marks a significant milestone in OSL’s commitment to enhancing its capabilities and delivering cutting-edge solutions in counter-drone technology.
Established in 2017, Nexus Nine has been at the forefront of advancing the testing and evaluation of uncrewed systems and related equipment. Their solutions span a broad spectrum of Uncrewed Aerial Systems (UAS) and Counter-UAS trials, testing, measurement, training, and more.
Nexus Nine is backed by a wealth of Civil Aviation Authority (CAA) accreditations, flying permissions, and a team of industry-recognized experts specializing in civilian and military crewed/uncrewed operations. As a result, the company can swiftly identify cost-effective solutions, establish safety parameters, and craft streamlined programs that validate requirements and showcase advanced capabilities.
The acquisition of Nexus Nine by OSL brings together two industry leaders to cement a mission to create safer spaces worldwide. OSL, known for its widespread expertise in supplying an array of drone detection, site security, and automated drone operations solutions, will leverage Nexus Nine’s capabilities to bolster its leading UAS support further.
Speaking on the acquisition, CEO of Nexus Nine Mick Davidson, says:
“We are excited to join forces with OSL to continue our mission of enhancing, protecting, and supporting our customers’ capability development. This partnership will allow us to take our expertise in UAS testing and evaluation to new heights and contribute to OSL’s vision of being an industry-leading partner for smart air and ground systems.”
Mark Legh-Smith, CEO of Operational Solutions Ltd, added, “The acquisition of Nexus Nine marks a significant step in OSL’s journey to provide innovative solutions that protect critical infrastructure and ensure the responsible use of UAS technology. Together, we can advance the field of UAS and C-UAS technology, all while delivering exceptional solutions for our clients.”
The acquisition of Nexus Nine by Operational Solutions signifies a promising future for both organizations, which will lead to the development of groundbreaking technologies and services in uncrewed aircraft operations. OSL remains committed to delivering excellence in drone detection and security solutions to its clients, and this acquisition strengthens that commitment.
About OSL
OSL provides situational intelligence to create safer spaces on the ground and in the air. We provide innovative solutions based on disruptive technology, such as data fusion and artificial intelligence, to enhance our clients’ operations’ security, safety, and efficiency. With applications in drone detection, drone management, and perimeter security, we aim to enable rapid, responsive approaches that safeguard the public and property. (Source: C-UAS Hub)
12 Oct 23. The Seraphim Space Q3 investment report details the changing investment landscape for the sector. After a difficult few years with investment falling since 2021, this quarter reveals that the sector has finally turned a corner with investment levels beginning to rise again.
Below details some key global investment points as well as a breakdown of the UK market which has seen a particular strong quarter.
The Global Space investment sector has turned a corner:
- Investment into SpaceTech for the third quarter continues to show signals of recovery. While the number of deals remained largely in line with the previous quarter, total global investment has recorded a 39% increase over the previous quarter – ($1.6bn was invested in Q3 compared to $1.16 in Q2).
- There was a considerable shift in the distribution of investment between early-stage and late-stage deals. Q3 saw 82% of investment into late-stage businesses, as opposed to Q2 with 63%. This shift was in large part spurred on by the return of large investments seen by companies such as Axiom, Sierra and MapBox within the quarter.
- The return of growth rounds is significant, as large growth rounds were largely absent through the economic uncertainty in 2022. The return of growth deals suggests renewed investor confidence in the sector, with the introduction of well-known private equity investors, such as KKR, Advent and Blackrock, entering the sector to build their SpaceTech exposure.
M&A set for a record year
- M&A within SpaceTech is also at all-time highs. The deal volume is largely being driven by well-capitalized New Space acquirers. 2023 is on track to be a record-breaking NewSpace M&A year, with 21 deals completed already versus 22 in 2022. Recent high-profile deals include Eutelsat’s merger with OneWeb, and multiple private equity backed acquisitions of New Space companies. SpaceTech deal numbers in the twelve months to Q3 2023 were up 45% year-on-year, versus the broader market where M&A deals of venture-backed startups globally decreased by 31% compared to the previous year.
Strong growth for seed funding
- From a sector breakdown, Build products – companies which launch vehicles and satellites to provide services to consumers from Space – saw the largest number of deals within the period, with a high proportion of early-stage deals, for businesses developing novel satellites, propulsion systems and satellite subsystems.
- The Product category emerged as another standout sector, drawing in 25% of the total investment for the quarter. Investors have demonstrated a keen interest in using SaaS and software enterprises that can help leverage space and satellite-derived data. These businesses develop products tailored to terrestrial business use cases as well as everyday consumer needs, enabling them to tap into vast terrestrial markets. This underscores the significant growth potential and revenue opportunities that are inherent within the Product sector.
- Seed-stage funding has continued to increase in 2023, representing 10 per cent of all investment in the quarter. Similarly, Series C has tripled in the period thanks to the rapid rise of investment in Product and Build products. Interestingly,
UK Space Sector records strongest quarter in Europe
- This quarter, the UK was the success story of Europe, having almost doubled the total amount invested year on year to $326m. Overall, UK investment increased by 22% in Q3 compared to Q2.
- In the UK, the Product and Build sectors recorded the largest growth within the period. This was driven by growth stage investment in climate-related Product companies, and on the Build side through support for satellite companies such as Open Cosmos (which also plays to the climate theme through novel Earth Observation).
- The growth in the number of Seed deals in the UK indicates new businesses being founded in the UK space sector. Series A deals have continued to demonstrate strong strong growth, especially in the downstream market – specialising in satellite wireless technology – with notable fundraises including Fatmap and Sofant.
- In the UK, investment into Series C funding rounds increased by 70%. This mimics the broader trend seen in the US and Asia, where Series C investment rapidly accelerated year on year.
- UK deal numbers have grown after a decline in the previous 12-month period. This is likely due to UK investors having pulled back earlier than other geographies as the market downturn began at the start of 2022 but is a clear signal of a return of investor interest into the space sector driven by investment in Product companies, which were also the key driver during the UK’s strong investment years 2020 and 2021.
11 Oct 23. The iLAuNCH collaboration has invited businesses to apply for its second round of grants to fund space research.
Companies have until Monday, 20 November 2023, to bid and the team will host an online information session on Wednesday, 1 November. To find out more, click here.
The $180m iLAuNCH trailblazer is a partnership between academic institutions and more than 20 industry partners aimed at accelerating the development of the space manufacturing sector.
New iLAuNCH projects must be undertaken with one of three partner universities: the University of Southern Queensland, the Australian National University or the University of South Australia.
They also need to be in one of its “core commercialisation” project areas that include:
- Additive manufacturing
- Material processing and advanced materials
- Hypersonics and flight diagnostics
- Rocket launch; rocket manufacturing
- Satellites, communications and sensors
- Advanced technologies for aerospace and space applications
“The iLAuNCH Trailblazer is a $180m program to transform Australia’s competitiveness by rapidly commercialising university research through industry partnerships. Our efforts directly enhance Australia’s burgeoning space industry,” said executive director Darin Lovett.
“We have already brought together a powerful consortium of industry and research partners focusing on developing advanced technologies for space and aerospace manufacturing applications, including associated manufacturing supply chains.
“iLAuNCH commercialisation projects aim to elevate the technology readiness level (TRL) of research projects to commercial-ready applications, foster pathways to market, and ultimately propel Australia’s space and aerospace industries to profitability.”
It comes after Space Connect reported earlier this month how iLAuNCH’s next project would see it try to develop light, radiation-proof coatings for low-Earth orbit (LEO) satellites.
The organisation hopes its work with start-up New Frontier Technologies would ultimately bring down the cost of launch, given payloads are usually billed per kilogram of weight by launch providers.
Lovett said he hoped the new collaboration would develop protective coatings for carbon composite components that are deployed in space for long durations.
“We are developing world-class sovereign manufacturing capability that is cost competitive and utilises the latest advancements in materials – vital for realising the full potential of an Australian space manufacturing industry,” he said.
The coatings have to balance saving weight with being able to withstand a range of environmental hazards experienced in LEO, such as UV irradiation, atomic oxygen, and space debris. (Source: Space Connect)
11 Oct 23. Qinetiq seek command and control sovereign capability. In a Q2 update Qinetiq stated it seeks Australian sovereign capability for specialised command and control vehicle.
Asecond quarter update from Qinetiq stated that the company’s new Engineering facility in Melbourne is establishing sovereign capability to deliver specialised command and control vehicles.
The initial response to Qinetic’s new Engineering facility in Melbourne has been promising, with a growing demand for its services, now poised to establish a sovereign capability for delivery of specialised command and control vehicles.
The Australian ministry of defence develops implementations industry plans for each sovereign capability priority that outlines the critical industrial capabilities that underpin each priority and details government actions to support the industrial base in these sectors.
The Q2 update statement
The Q2 update statement also revealed Qinetiq Group plc has achieved impressive results in the second quarter, leading to a notable increase in organic revenue growth and operating profit margin during the first half of this year, as compared to the corresponding period in the previous year.
“I am extremely pleased that the Group continues to perform well, delivering strong organic revenue growth at stable margins in the first half of the year, moderately ahead of expectations,” said Steve Wadey, Qinetiq Group Chief Executive Officer.
“Record first half order intake demonstrates that our distinctive offerings remain in high demand across all our home countries, as our people continue to deliver high-value services and products critical to national defence and security,” he continued.
“Based on our strong first half performance, we have de-risked our full year results and are on track to deliver another year of good organic revenue growth at stable margins in line with our full year expectations.”
Optimistic financial performance outlook
In the first half of the year, cash conversion experienced a decline compared to the previous year, primarily attributed to short-term timing factors. However, the company remains confident that cash conversion for the full year will align with its previously provided guidance.
Qinetiq has managed to secure a first half order intake of approximately £950 million. This has not only bolstered its order backlog but has also significantly enhanced its revenue under contract for the entire year, up to 90%.
With a slew of substantial new orders and the renewal of major contracts, Qinetiq has successfully mitigated potential risks for the latter half of the year. As a result, it is poised to achieve yet another year of organic revenue growth, maintaining stable margins that align with its full-year projections and long-term guidance.
In the second quarter, the division secured several new programmes and renewed significant contracts. Notable examples include two substantial contracts: a five-year agreement worth $224m has been awarded to deliver mission support to the US Space Development Agency (SDA); and a five-year contract valued at $127m from the US Department of Defence (DoD) Strategic Capabilities Office (SCO). (Source: airforce-technology.com)
10 Oct 23. Amaero International announces cessation of Australian operations. Integrated metal 3D printing developer Amaero International has announced a cessation of its operations in Australia.
Amaero International, which produces prototyping and manufacturing for aerospace, defence, and tooling, has announced the company will terminate its leases at its South Australian and Victorian premises and any ongoing commercial contracts in Australia will be ended.
Additionally, equipment and inventory held in Australia may be shipped to the Tennessee facility or will be sold.
“The decision reflects the company’s commitment to focus its executive team on flagship operations in the US and to prudently manage operating expenses,” a company statement said on 10 October.
“The company will continue to evaluate commercial opportunities in Australia that include adjacency opportunities in mining critical minerals, as well as advanced manufacturing for the aerospace and defence, space and energy sectors.
“Amaero International Limited is an ASX-listed company focused on becoming a global leader in titanium and speciality powder production and advanced manufacturing applications that utilise titanium and speciality alloy powder for aerospace and defence, medical and other industries.” (Source: Defence Connect)
11 Oct 23. QinetiQ Group plc (“QinetiQ” or “the Group”) today issues a trading update covering its second quarter of trading.
Strong organic first half performance – on track to deliver full year expectations
- The Group has delivered a strong second quarter, resulting in improved organic revenue growth and operating profit margin in the first half of the year compared to the same period last year.
- We also secured a record first half order intake at c.£950m, increasing our order backlog and improving our revenue under contract for the full year to 90%, consistent with the prior year.
- With significant new orders and major contract renewals, we have de-risked the second half and are on track to deliver another year of good organic revenue growth at stable margins in-line with our full year expectations and long-term guidance.
- Global Solutions has performed well. The former Avantus business in the US continues to deliver revenue at double-digit margin and had an excellent second quarter securing a number of new programmes and significant contract renewals including the five-year $224m contract to provide mission support to the US Space Development Agency (SDA) and the recently announced five-year $127m contract with the US Department of Defence (DoD) Strategic Capabilities Office (SCO).
- EMEA Services has also continued to perform well. We have delivered impressive organic revenue growth with improved profit margin, and secured orders of more than £600m.
Steve Wadey, Group Chief Executive Officer said: “I am extremely pleased that the Group continues to perform well, delivering strong organic revenue growth at stable margins in the first half of the year, moderately ahead of expectations. Record first half order intake demonstrates that our distinctive offerings remain in high demand across all our home countries, as our people continue to deliver high-value services and products critical to national defence and security. Based on our strong first half performance, we have de-risked our full year results and are on track to deliver another year of good organic revenue growth at stable margins in line with our full year expectations.
“Our strong operational performance combined with disciplined execution of our multi-domestic strategy demonstrates our robust financial framework in action, delivering attractive value and long-term sustainable success for our shareholders.”
10 Oct 23. Honeywell to realign business segments to boost growth.
Honeywell (HON.O) said on Tuesday it is realigning its business to focus on three broad business trends in its efforts to boost sales growth and reallocate capital, while strong demand may lead to a better-than-expected profit in the current quarter.
The company, which named insider Vimal Kapur as its new CEO in March, said it would focus on three “compelling megatrends” – automation, the future of aviation and energy transition.
The updated reporting structure will have four lines of business that reflect the new focus – Aerospace Technologies, Industrial Automation, Building Automation, and Energy and Sustainability Solutions.
The development comes as industrial automation firms benefit from an ongoing labor shortage in the US, while a resurgence in aircraft demand has boosted profit at aerospace suppliers like Honeywell.
The company said on Tuesday it expects third-quarter profit to be within or above its previous estimate of $2.15 to $2.25 per share.
The reorganization is expected take effect from the first quarter of 2024.
“This simplified structure will enable Honeywell to realize synergies that will accelerate our innovation playbook,” Kapur said. (Source: Reuters)
29 Sep 23. BryceTech: Commercial space ventures update. Start-up space ventures attracted approximately $8bn in total financing in 2022. This investment was in the form of 154 deals, involving more than 400 investors, in 123 companies based in 20+ countries.
Four key insights shaped the start-up space environment in 2022.
Venture investment in space decreased from 2021, reflecting the broader investment environment.
2022 start-up space investment levels are below the record-shattering levels seen in 2021 but remain strong compared to previous years.
The magnitudes for debt financing and acquisitions increased due to a few significant investments.
Public offering activity declined in 2022 after emerging as a major source of start-up space funding in 2021.
The report dives into investment trends in 2022, explaining how monetary policy tightening affected global venture capital investment in space, the surge in debt financing and merger and acquisition activity, and trends in public offerings events, including special purpose acquisition company activity.
Future performance risks remain for some space ventures, due to unproven business models, uncertain customer bases, and typically lengthy time horizons for space businesses to mature. (Source: Satnews)
29 Sep 23. Euroconsult: Lunar ambitions boost space exploration funding. Lunar exploration is the catalyst behind an unprecedented surge in the space exploration sector which saw global government investment rise to an impressive $26 bn during 2023. Ambitious lunar missions are projected to boost investment to nearly $33bn by 2032, a growth trajectory which underscores lunar exploration’s pivotal role in shaping the future of space exploration. The figures are revealed in the just published, fourth edition of Euroconsult’s ‘Prospects for Space Exploration‘ report.
Market expansion is anticipated to continue fueling global investment and, over the next decade, Moon exploration is expected to achieve a remarkable 5% 10-year compound annual growth rate (CAGR), ultimately reaching nearly $17bn by 2032. The surge in funding will primarily support upcoming human spaceflight missions, necessitating substantial investments in transportation and orbital infrastructure. Additionally, increased investments in robotic lunar missions will help pave the way for a sustained human presence on the Moon.
The second-largest space exploration investment stream is human spaceflight in LEO, an area that experienced a dip in recent years following the completion of major government and public-private programs. A new investment cycle is on the horizon, peaking at $7bn by 2030, and this will support the final years of operation and decommissioning of the International Space Station (ISS) as well as increased investments to ensure a smooth transition of post-ISS, LEO operations into the private sector.
Mars exploration investments are also expected to grow steadily, with a 2% 10-year CAGR, to surpass $2.5 bn by 2032. These investments will be primarily directed towards already planned missions, notably sample-return missions, which will contribute to growth in this sector.
Other Deep Space exploration funding is predicted to continue on an upward trajectory, averaging around $2bn by 2025 and demonstrating an on-going global commitment to exploring the far reaches of our solar system. Astronomy, Astrophysics & Heliophysics, with a current annual spend level of $4bn, is expected to persist throughout the decade and remain significant fields of interest for space agencies worldwide.
Overall, the coming decade is poised to witness a surge in space exploration missions to a total of over 750, which represents a substantial increase from the 236 missions conducted in the previous 10 years. Human spaceflight in LEO will dominate, accounting for 36% of the total, closely followed by lunar exploration at 31%. The commercial space exploration sector is rising too and will comprise 31% of the total missions, an increase driven by both LEO, including crew and cargo transportation missions, and lunar exploration endeavors.
The focus on lunar exploration is driven by a blend of strategic and geopolitical motivations and establishing a sustainable presence on the Moon is considered a pivotal step toward enabling future human missions to Mars. This has resulted in the emergence of a duopolistic context in lunar exploration, with the U.S.-led Artemis program and China-led International Lunar Research Station (ILRS) program taking center stage.
Euroconsult’s ‘Prospects for Space Exploration’ report also highlights the existence of numerous challenges and risks. Business cases in this sector still heavily rely on government contracts in the near- and medium-term, emphasizing the need for sustainable economic models as the lunar and LEO economies continue to develop.
Euroconsult now offers a free report extract for download, granting a preview of the essential market insights found within the full report.
“We are on the verge of a new era in space exploration marked by a paradigm of collaboration and competition. Establishing a sustainable lunar presence is the main global focus, while also maintaining a sustained LEO human presence. This transformative era in space exploration is not limited to governments alone; the private sector is playing an increasingly significant role. Fueled by renewed interest in space exploration from governments worldwide, numerous companies are seeking to provide commercial services in space exploration.” — Natalia Larrea, Director of Euroconsult USA. (Source: Satnews)
—————————————————————————————————————
SPX CommTech, part of SPX Technologies Inc, innovates specialised technologies within the Radio Frequency (RF) spectrum to ensure a smarter, more secure future for all. Formed by TCI and ECS, SPX CommTech’s Battlespace portfolio enables defence and security teams to detect, defeat and exploit RF signals to enhance communications intelligence (COMINT) and counter unmanned aerial systems (Counter-UAS). Additionally, its Tactical Data Link portfolio allows intelligence gathering agencies, special forces, emergency response, and security teams to securely and reliably transfer video and data between enabled-aircraft and ground teams over long distances for airborne Intelligence, Surveillance, Reconnaissance (ISR). For more information visit www.tcibr.com and www.enterprisecontrol.co.uk
————————————————————————————————————–