BETHESDA, Md. - Lockheed Martin (NYSE:LMT) [NYSE: LMT], a global defense technology company, has entered into a definitive agreement to purchase Terran Orbital [NYSE: LLAP], a prominent satellite solutions provider for the aerospace and defense sectors. The transaction is valued at approximately $450 million.
The acquisition, expected to close in the fourth quarter of 2024, will see Lockheed Martin pay $0.25 in cash per outstanding share of Terran Orbital's common stock and retire its existing debt. Additionally, a new $30 million working capital facility has been established for Terran Orbital by Lockheed Martin and other current creditors.
Terran Orbital, recognized for its high throughput robotic manufacturing and modular space vehicle designs, has supported over 80 missions, including those for government and commercial clients. Lockheed Martin has been Terran Orbital's largest customer, leveraging its satellite technology for various programs and technology demonstrations.
Robert Lightfoot, president of Lockheed Martin Space, emphasized the alignment of Terran Orbital's capabilities and business momentum with Lockheed Martin's strategic plans. He expressed enthusiasm for the enhanced technology and expedited product development that the merger is anticipated to yield.
Marc Bell, chairman, CEO, and co-founder of Terran Orbital, also highlighted the growth and innovation opportunities the transaction is expected to unlock. Bell anticipates that access to Lockheed Martin's resources will accelerate Terran Orbital's business plan to deliver cost-effective, high-value solutions.
The acquisition marks the first time Lockheed Martin has sought to purchase a company from its Lockheed Martin Ventures portfolio since the fund's inception in 2007. Terran Orbital became part of this portfolio with an initial investment in 2017, followed by additional investments in 2020 and 2022.
Upon completion of the acquisition, Terran Orbital will continue to operate as a commercial merchant supplier to the industry. The deal is contingent upon customary closing conditions, including regulatory and Terran Orbital stockholder approvals.
This strategic move is intended to expand Lockheed Martin's advanced satellite manufacturing and responsive space capabilities, reinforcing its commitment to innovation and scientific discovery in the defense technology domain.
The information contained in this article is based on a press release statement.
In other recent news, Terran Orbital Corporation has made several significant moves. The company has announced a $98 million at-the-market stock offering program, with H.C. Wainwright & Co., LLC acting as the sales agent. This program is designed to bolster the company's capital for ongoing and future projects, according to CEO Marc Bell.
Additionally, Terran Orbital has entered into a strategic partnership with Hanwha Systems to develop advanced satellite and solar technologies. This collaboration is expected to enhance defense capabilities for the United States and South Korea.
On the financial front, Terran Orbital reported a slight decrease in Q1 2024 revenue, reaching $27.2 million, a 3% drop year-over-year, and a gross loss of $6.2 million. However, the company maintains a robust backlog of $2.7 billion and anticipates profitability by Q4 2024.
Regarding its executive team, Terran Orbital has announced new appointments aimed at bolstering its operational efficiency and financial performance. Peter Krauss will serve as Chief Operating Officer, Adarsh Parekh as Chief Financial Officer, and Mathieu Riffel as Chief Accounting Officer.
Finally, Terran Orbital faces a challenge with NYSE delisting over a low stock price, but the company has stated its commitment to resolving the issue within the allotted cure period. These are the recent developments for Terran Orbital.
InvestingPro Insights
As Lockheed Martin [NYSE: LMT] moves forward with its acquisition of Terran Orbital [NYSE: LLAP], investors are closely monitoring the financial health and market performance of the satellite solutions provider. According to the latest data from InvestingPro, Terran Orbital's market capitalization stands at $81.76 million. Despite the challenges highlighted by an adjusted P/E ratio of -0.52 for the last twelve months as of Q2 2024, the company has demonstrated a revenue growth of 10.75% during the same period, suggesting potential in its business operations.
InvestingPro Tips for Terran Orbital indicate that the company operates with a significant debt burden and may have trouble making interest payments on its debt, which are important considerations for investors as Lockheed Martin plans to retire Terran Orbital's existing debt post-acquisition. However, analysts anticipate sales growth in the current year, which could be a positive signal for the future financial performance of the company.
It's also worth noting that Terran Orbital's stock has experienced significant volatility, with a price total return of -69.92% over the last year, and is trading near its 52-week low. This level of market performance underscores the InvestingPro Tip that the stock generally trades with high price volatility.
For investors seeking a deeper analysis, InvestingPro offers additional tips on Terran Orbital. These insights, which include expectations on net income growth and stock price movements, can be further explored by visiting https://www.investing.com/pro/LLAP.
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