By Chris Forrester
The fastest way for a ‘start up’ to exit is usually via a merger or acquisition. The panel at the Smallsat Symposium in Mountain View on February 5 discussed the current picture. Moderated by Alexis Sáinz, Partner, at Hogan Lovells, who said back in 2023 there was a wave of consolidation with names such as Viasat/Inmarsat, Eutelsat/OneWeb, SES/Intelsat, and Maxar. Last year was quieter, although he cited the AeroVironment $4.1 billion acquisition of Blue Halo last year as a good case in point. Although this was not one of Hogan’s deals, he praised the action as an excellent fit.
Armand Musey, Financial & Valuation Consultant, Summit Ridge Group, said recently they were focussing on D-2-D, FSS and ground equipment, however, he said he was pessimistic. “The big, large space companies are entering into a deep, dark desert of disruption and despair. It is not pretty. The consolidations mentioned were designed to better prepare them to fight SpaceX and Starlink, but now it’s clear to me that consolidation is not going to help them. This is a depressing place to be for these big companies. If we look at D2D there has not been direct M&A but plenty of partnering. We’ve seen Apple and GlobalStar, Starlink and T-Mobile, AST and Ligardo, and these were done to almost hedge people’s bets.”
Musey said he expected European consolidation to happen once governments decide what they want to do with both satellite manufacturing and launch. “In general space is strategically very important but [Europe] is so far behind when compared with SpaceX and Starlink that it is inevitable that there will be consolidation.”
Karl Schmidt, MD, KuippsDeSanto & Co., said they were working in defense, government space as well as on-orbit activity and ground satcoms and high-end engineering services. “We had a record 2024, although deals were down.” He told delegates that of last year’s deals in aerospace and defense about 15% of them involved space or space related activity. In 2025 we would expect space components to again figure with similar percentages.”
Tyler Letarte, Principal, AE Industrial Partners, focuses on space investments with small and medium satellites as well as sub-systems and the broader space economy. However, he said that 2024 was notable in the number of deals that did not get done! There were between 6 and 10 deals that we expected to see transacted and some are still lingering and we are hopeful that they will get done. In our view the winners and losers have begun to emerge.”
Akshay Patel, MD at PJT Partners, said he was spending a lot of time in the small-sat area. “My view is that a lot of activity last year was dependent on Space Development Agency (SDA) work and awards. Many of these companies have SDA revenues in their own pipelines. Those SDA timelines are somewhat delayed and this has created ripple effects down the line. For 2025 it remains a guessing game. Tranche 3 awards are beginning to flow, but we also have a new Administration and it is unclear as to which path will be taken. Vertical integration can be expensive.”