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Lockheed Martin LMT-0.04% said Thursday it would acquire a satellite maker, sending the struggling company’s stock down by more than 40%.
The Bethesda, Maryland-based aerospace and defense company will acquire Terran Orbital (LLAP) for 25 cents per share in cash and retire the company’s existing debt. The deal is valued at about $450 million — less than the $600 million bid it made in March —and is expected to close in the fourth quarter. It will also create a $30 million capital facility to fund Terran as the deal finalizes.
Lockheed has been using Terran Orbital’s satellites for its work for more than seven years, including on its Space Development Agency’s Transport program, the companies said in a statement. Lockheed already owns about a third of Terran Orbital from past investments.
“Their capabilities, talent and business momentum align with Lockheed Martin Space’s strategic plans – and we’re looking forward to welcoming them to our team,” Robert Lightfoot, the president of Lockheed’s space division, said in a statement. “Our customers require advanced technology and even faster product development, and that’s what we can achieve together.”
In a statement, Terran CEO Marc Bell said access to Lockheed’s engineers and facilities will “only accelerate our business plan to provide low-cost, high-value solutions to our ever-growing customer base.”
The deal would provide Terran with some much-needed cash. The firm had less than $15 million in cash at the end of July and warned it would need additional funding to meet its obligations over the next 12 months. The Boca Raton, Florida-based company also has around $300 million in debt.
Terran has said that Lockheed accounts for 91% of its remaining funded contracts and represented 69% of its consolidated revenue for the last fiscal quarter, according to regulatory filings. A large portion of its backlog had been from a $2.4 billion contract with Rivada Space Networks, which has only provided $6.2 million over the first half of 2024. That cut its total backlog to $312.7 million from $2.7 billion.
Lockheed Martin stock nudged down less than 1% in trading Thursday. Terran Orbital stock is down almost 41%. Since Jan. 1, shares have dropped more than 81%.