Lockheed to acquire smallsat maker Terran Orbital in $450M deal

WASHINGTON — Lockheed Martin announced today it would acquire Terran Orbital, its longtime partner in the satellite world, in a $450 million deal.

The proposed agreement — which sits below Lockheed’s previous bid of $600 million in March, according to CNBC — would resolve the small-satellite startup’s reported debt struggles, with Lockheed pledging to retire its existing debt and establish a new $30 million working capital facility to keep it afloat until the transaction closes.

Lockheed has been Terran Orbital’s largest customer, with the defense giant having used the smallsat startup’s satellites for the Space Development Agency’s Transport and Tracking Layer of small satellites in low Earth orbit for data relay and missile warning/tracking.

The deal marks the first time Lockheed has sought to acquire a company from its Lockheed Martin ventures portfolio. It also positions Lockheed — traditionally a maker of large, bespoke satellites for the US government — as a potential supplier of small satellites to other major space companies, stating in its announcement of the deal that, “upon closing, Terran Orbital will remain a commercial merchant supplier to industry.”

Terran Orbital also brings its expertise in synthetic aperture radar (SAR) for remote sensing, with its PredaSAR subsidiary.

The acquisition is expected to close in the fourth quarter of 2024 pending regulatory approval.

“We’ve worked with Terran Orbital for more than seven years on a variety of successful missions,” Robert Lightfoot, president of Lockheed Martin Space, said in a statement. “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. Our customers require advanced technology and even faster product development, and that’s what we can achieve together.”

Terran Orbital CEO Marc Bell said in the release that the move “will open new opportunities for growth and innovation, and we couldn’t be more excited about the future. Access to Lockheed Martin’s incredible engineers and world class facilities will only accelerate our business plan to provide low-cost, high-value solutions to our ever-growing customer base.”

Terran Orbital went public in 2022 in a $1.8 billion valuation. Lockheed announced its first investment in the company in 2017, as a part of its ventures portfolio, with additional investments in 2020 and 2022.

Terran Orbital has supported more than 80 missions over the past decade for government and commercial customers, Lockheed said.

In 2023, Terran Orbital received $500 million from the Defense Advanced Research Projects Agency for the organization’s Digital Radar Image Formation Technology (DRIFT) program. Under that effort, the company is expected to demonstrate at least two SAR satellites, which will fly in formation to better see a target area and allow fusion of imagery via advanced processing.

Theresa Hitchens in Washington contributed to this report.