WASHINGTON — Lockheed Martin has proposed acquiring smallsat manufacturer Terran Orbital, which it already owns a stake in and does business with, for more than $500 million.
In a U.S. Securities and Exchange Commission filing late March 1, Lockheed disclosed its offer to Terran Orbital building upon previous discussions between the companies facilitated by investment firm Jefferies LLC. Terran Orbital disclosed in an SEC filing in December that it had hired Jeffries to explore “strategic alternatives” for the company that could include a sale or a deal to take the company private.
Under the proposal, Lockheed would pay $1 per share of Terran Orbital stock it does not currently own, valuing the company at a little under $200 million. Lockheed would pay more than $70 million to buy outstanding stock warrants and assume or repay $313 million in Terran Orbital debt.
“Terran represents an attractive opportunity for Lockheed Martin, and we are treating the potential Transaction as a strategic priority,” Lockheed stated in the letter. “Terran’s superior capabilities and business momentum align with one of Lockheed Martin Space’s strategic growth priorities and the Transaction would accelerate that strategy.”
Lockheed Martin is already a major customer of, and investor in, Terran Orbital. Lockheed participated in Terran Orbital’s Series A round in 2017 and made another investment in Terran Orbital in 2022 that increased its stake in the company to more than 33%.
Lockheed has acquired Terran Orbital buses for several of its programs, including spacecraft for Space Development Agency constellation programs. It noted in its letter that its current contracts with Terran Orbital account for 81% of that company’s backlog as of the end of 2023.
“In addition to being the largest historical revenue generating customer we are confident that we will continue to be the largest revenue generating customer for Terran for the…
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