Lockheed Martin Sets Its Sights on Terran Orbital Acquisition
Lockheed Martin [NYSE: LMT] has today declared the finalization of a binding agreement to purchase Terran Orbital [NYSE: LLAP], a prominent contender in satellite-driven solutions primarily serving the aerospace and defense sectors.
Terran Orbital offers high-capacity, automated manufacturing facilities and well-designed modular space vehicle systems. When paired with Lockheed Martin’s distinguished track record of performance and creativity, this acquisition will introduce an even wider array of capabilities and advantages for its clientele. Lockheed Martin currently utilizes Terran Orbital’s satellites in various projects, particularly with the Space Development Agency’s Transport and Tracking Layer initiatives, along with numerous self-funded technology demonstrations.
“We’ve collaborated with Terran Orbital for more than seven years on various successful endeavors,” stated Robert Lightfoot, president of Lockheed Martin Space. “Their expertise, workforce, and business dynamism resonate with Lockheed Martin Space’s strategic objectives – and we eagerly anticipate integrating them into our team. Our clients demand cutting-edge technology and accelerated product development, and that’s what we can accomplish together.”
This acquisition is poised to forge a route for further progress, as Lockheed Martin persists in investing in technology, personnel, and capacity to meet future client demands.
“This acquisition merges our strengths and proficiency,” remarked Marc Bell, chairman, CEO, and co-founder of Terran Orbital. “This decision will unveil fresh avenues for expansion and innovation, and we couldn’t be more thrilled about what lies ahead. Gaining access to Lockheed Martin’s exceptional engineers and state-of-the-art facilities will only expedite our business model to offer cost-effective, high-value solutions to our expanding customer network.”
Transaction Insights
The enterprise value of this deal is approximately $450 million. Lockheed Martin will procure Terran Orbital for $0.25 in cash for every outstanding common stock share while also managing its existing debt. Additionally, this agreement facilitates Lockheed Martin and other current Terran Orbital creditors in establishing a new, $30 million working capital fund that has been activated as of the signing.
The deal is projected to finalize in the fourth quarter of 2024 and is contingent upon meeting customary closing requirements, including regulatory and Terran Orbital shareholder approvals. Upon closure, Terran Orbital will still function as a commercial supplier to the industry.
Established Spacecraft Collection and Technology
Terran Orbital boasts a successful history of aiding over 80 missions in the last decade for both government and commercial clients with complex mission demands, spanning from low Earth orbit to the Moon and further. Currently, Lockheed Martin stands as Terran Orbital’s most significant client. This enduring partnership between the companies highlights a profound cultural sync and the capacity to identify synergies between both enterprises.
Terran Orbital joined the Lockheed Martin Ventures (LM Ventures) portfolio, a fund focused on investing in technological innovations to stimulate growth across existing and new strategic segments for the company, with an initial investment in 2017. LM Ventures has subsequently made two more investments in Terran Orbital in 2020 and 2022. This acquisition marks the first LM Ventures company that Lockheed Martin has targeted for purchase since the fund’s inception in 2007.
