Raytheon Technologies is still integrating its two legacy businesses but has found a small satellite maker it apparently could not pass up on the opportunity to acquire.
(EDITOR'S NOTE: This story has been updated to include the purchase price)
Raytheon Technologies remains hard at work on integrating its two legacy businesses since they came together in April, but in the meantime found an acquisition opportunity it apparently could not pass up.
Raytheon announced Tuesday it has agreed to purchase Blue Canyon Technologies, a privately-held small satellite maker whose primary customer base has been commercial with government an increasing focus.
During an investor conference on Wednesday hosted by Baird, Raytheon Chief Financial Officer Toby O'Brien said the purchase price is "about $350 million net of tax benefits."
"But it's strategic and it will enable us to deliver a broader range of solutions to support our customers' space missions," O'Brien added. "We expect the transaction to close early in 2021."
Privately-held Blue Canyon is headquartered in Boulder, Colorado and has at least 90 satellites in production for customers such as the Air Force, NASA and Defense Advanced Research Projects Agency. Blue Canyon will become a part of Raytheon’s Arlington, Virginia-based intelligence and space business when the deal closes.
“The space market is rapidly expanding and our customers need comprehensive solutions faster than ever before,” Roy Azevedo, president of Raytheon’s intelligence and space segment, said in a release. ”What makes Blue Canyon Technologies the right fit for our business is its agile, innovative culture and expertise in small satellite systems and technologies.”
One of Blue Canyon’s most high-profile successes in the government market has been for DARPA, which in July awarded the company a $14.1 million contract to build four satellite buses for the Blackjack program.
Blackjack is focused on further advancing a high-speed network in low Earth orbit that gives the U.S. military continuous coverage. The contract with Blue Canyon has options for up to 20 satellites for $99.4 million.
Blue Canyon has nearly 200 employees and is credited for providing attitude control systems for the first interplanetary “CubeSats” that made it to Mars.
Jefferies acted as the exclusive financial adviser to Blue Canyon, while King & Spalding LLP and Hutchinson Black and Cook LLC were the legal advisers.