Satellite operators see acquisition opportunities

Space

NATIONAL HARBOR, Md. — Companies that operate both geostationary satellites and low Earth orbit constellations say they see opportunities to acquire complementary firms but cautioned that a long-projected consolidation of the industry isn’t likely in the near future.

In a panel discussion at the Satellite 2021 conference here Sept. 7, Bret Johnsen, chief financial officer of SpaceX, discussed his company’s quiet acquisition of Swarm Technologies, a company operating a constellation of smallsats providing internet-of-things services. Neither company announced the deal, which was disclosed only when Swarm filed a request with the Federal Communications Commission in August to transfer its licenses to SpaceX.

That deal is still going through a regulatory review known as Hart-Scott-Rodino, he said, and he did not disclose the terms of the acquisition. The reasons he offered for the deal are similar to what Swarm disclosed in its FCC filing.

“We identified a company that had some intellectual property that we found interesting and a fantastic team that we can leverage,” he said. “It felt like the right opportunity.”

Johnsen left the door open to additional deals. “We obviously haven’t been very acquisitive in the past,” he said. “If there was something that met the right requirements, I think it’s something we would look at.”

Neil Masterton, chief executive of OneWeb, said his company is focused on small, targeted deals, citing as an example the company’s acquisition in May of TrustComm, a managed satellite communications provider, giving OneWeb access to the U.S. government market.

“These are capability fillers which help us on our organic build out,” he said. “We will look at other, very small ‘tuck-ins’ that basically enable us to build out our capabilities to serve our customers.”

Among GEO satellite companies, Hadi Alhassani, vice president and chief strategy officer of Arabsat, said his company is evaluating a couple potential acquisitions of other regional satellite operators to expand the company’s geographical footprint. “To be honest, this is a good time to acquire,” he said. “There are good deals out there in GEO.”

That doesn’t mean, though, that a consolidation of satellite operators is imminent. “This is the conference where, every year, people ask if this is the year consolidation will happen,” said Matt Desch, chief executive of Iridium. “It still hasn’t, for the most part. But ultimately, some will have to.”

“I’m not sure where we are as an industry,” he added. “Right now we’re in a very choppy environment. There’s a lot of companies not doing all that well.” Desch said Iridium is open to considering acquisitions, but doesn’t feel pressured to do so given its strong cash flow.

“I don’t think there will be suddenly a flood of mergers,” he concluded. “Unless everything falls apart, and then maybe people will grab things quickly. But I think that’s still some time away.”

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