Sale of United Launch Alliance is nearing its end, with three potential buyers
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Rumoured, not confirmed. L3Harris is a key supplier of avionics etc. to the Vulcan-Centaur program and so would be well placed to make their own solid internal assessment of ULA's health. L3Harris also owns Aerojet Rocketdyne who make the Centaur's RL10 engine. L3Harris is about 13 times the size of ULA by revenue, so ULA would be a flagship subsidiary in the portfolio, but not a bet-the-company albatross, as might be the case to a smaller and less well capitalized buyer. It'd be a rather logical match-up.
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In this particular case at least hard to see that as being much more than a formality given the circumstances. Right now there is SpaceX and ULA for medium/heavy lift and that's it. Even if BO bought them and killed Vulcan in favor of their own once they got it working that'd still leave the same two players until someone else builds up, RL with Neutron or whomever. The only one who could buy them and reduce competition would be SpaceX who obviously have less than zero interest in that boat anchor. Perhaps national security review might happen for PE though? BO presumably can already navigate that and obviously any existing aerospace player would be set there as well.
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They're already big in government contracting and bought Viasat's military side last year for a couple billion dollars. Maybe they'd be looking to add launch services, but I don't feel like they fit the description Eric provided of the third bidder.
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An aerospace company without much government footprint, funds to buy ULA, meet the requirements to run NatSec/DoD contracts and the ability to get FTC approval seems like it's would be an extremely limited number of names....
I don't see how L3Harris could be considered to not have much space business or presence in the government space?
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I wouldn't be opposed to that. It seems like a decent matchup.
For private equity, it would take a very specific set of people involved to understand what they are getting and to have it remain viable either as a private company or sold to the next buyer. I would fear someone who just has lots of cash coming in, gutting it, and selling it for whatever they could get for it
Blue Origin is the one that makes me shudder. They can't even move fast enough to beat ULA in getting a new rocket out, and while Vulcan would get them some direct orbital launch experience, I think Vulcan would overall be a distraction from New Glenn. BO doesn't need any more old space influence or distractions slowing them down.
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You're making assumptions in your parsing of Eric's text.
"This aerospace company does not have a large amount of space business presently, but it has been looking to make strategic expansion into government contracts."
Wanting to expand into government contracts does not imply that they aren't already strong in that realm - just that they want more. As to whether one consider L3Harris' portfolio large in space business is up for debate. It's not a huge fraction of their revenue, but it's not nothing either.
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There may be a bargain for agreeing to buy before the launch. After a (successful) launch, other bidders may bid higher.
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As far as random speculation of the third bidder, think Kratos, Leidos, or Arundel. They all have a lot more capital than you might think.
(And Leidos through Dynetics has been trying to get in the space launch game for quite since time)
(And Leidos through Dynetics has been trying to get in the space launch game for quite since time)
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Kratos would be a very good fit. More than a bit of gas turbine expertise there.
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Yes, I'm assuming that "expanding into" does not mean the same thing as "expanding". It implies that they currently have no, or limited footprint in the government, not that they are massively invested in government contracts and are looking to expand a segment of that. That could very well be an incorrect assumption, but I take that phase to mean something different than just making their portfolio larger.
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You don’t have to name the company. Just keep saying why each guess is a bad one until it isn’t.…
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Well, there goes that idea. Eric have refuted my train of thought
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Kratos is probably too small. Their annual revenue is well under a billion dollars. Even if they have more capital than I think, it won't be on ULA's scale.
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I’ll admit it. I’m one of the potential buyers.
I just thought the Atlas V would make a great stocking stuffer.
I just thought the Atlas V would make a great stocking stuffer.
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Blue Origin has already announced that Bob Smith will be stepping down in December and has named Dave Limp as the next CEO. If Blue Origin does buy ULA, I wonder if he still gets the job? Or will they backtrack on Limp and give the spot to Tory Bruno?
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Or if Blue Origin is the purchaser, Vulcan 2 with BE3U second stage? "Just" shrink the New Glenn upper stage and put it on top of the existing lower stage tank and engines! Doesn't seem like the most logical use of their resources, but I could see the idea appealing to someone in middle/upper management. And I'd hazard a guess that management bloat won't be reduced by folding even more oldspace into BO...
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I got a sense that when ULA gets sold, Tory Bruno can just say job done and retires and cashed out his shares. He's already worked under the yokes of two underinvested bosses in Boeing and Lockheed Martin. I don't think getting Jeff Bezos will be an improvement.
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Think the other way around: New Glenn with Centaur V. That would a very powerful and competitive rocket to GTO and higher.
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This was my first thought about a private equity buyer as well. Buying a firm--almost always with debt financed against the buyout target's assets--and then stripping it for parts or using it to vacuum up smaller firms in order to become "profitable" against an industry behemoth is exactly what these kind of firms do. SpaceX is certainly not going anywhere, and ULA is dependent upon Blue Origin for engines, which means that Blue Origin must succeed (and has the financial support to make it happen).
What room does that really leave for ULA to be a high profit enterprise once New Glenn and Starship are flying, when they have no serious pathway towards competitive launch costs against even partially reusable launchers? Once those defense contracts dry up, there's not much future there without a pretty ambitious investment to attract new talent and chase new designs. Maybe there's a group of people with that kind of cash and a willingness to light it all on fire for no return, but there's a damn good reason that private equity's nickname is vulture equity.
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A bit sad that Lockheed is apparently not in the running. Lockheed fully owning ULA would give them a straight incentive to challenge the SLS hegemony with Orion on Vulcan. That’s probably also the reason they’re not among the buyers, however.
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I keep coming back to Sierra Space (or their parent) buying ULA to bring launch capability into the fold, since they have a ship nearly ready to go, and will be launched on Vulcan. No idea how their finances are though.
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Shot down in flames as spectacular as a Starship test flight.Well, there goes that idea. Eric have refuted my train of thought
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There would be no better way to celebrate Chanukah than lighting a huge flame, and thereby repudiating a vicious invader (the move away from Atlas V's RD-180 engines from Russia). Unfortunately, this launch will be several weeks late for that.
Also, Chanukah is really not a major holiday. No one is taking off from work for it. Its rough annual coincidence with Christmas should not be taken to lend it excess significance.
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I would think, and hope, the BO bid would be shot down as industry consolidation.
The USAF/Space Force wants more heavy lift options, not less.
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What would private equity do with a company that survives on government handouts because it can't handle one competitor, and has another very-well-funded competitor (and critical supplier) getting closer to competing with it with a bigger rocket ?
Any of the traditional big contractors adding to their portfolio makes sense, but I don't see how private equity extracts an ROI without killing the DoD-protected Golden Goose.
Any of the traditional big contractors adding to their portfolio makes sense, but I don't see how private equity extracts an ROI without killing the DoD-protected Golden Goose.
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But ULA is already dependent on BO? Is there reason to believe that BO (or existing aerospace company) buying ULA means that ULA is consolidated into BO, and not run as a subsidiary?
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I'm surprised Lockheed wants to sell their stake, when these rumors started appearing I assumed it was Boeing wanting out. From what I've seen internally, Lockheed wants to aggressively capture more of the space market. The attempted purchase of Aerojet Rocketdyne was part of the that plan, along with investment in Tyvak/Terran Orbital.
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ColdWetDog
Ars Legatus Legionis
Or the parties may be sophisticated enough to realize that a successful first flight isn’t an absolute requirement.
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Lockheed Space has long been interested in aggressively capturing more of the space payload market. Space launch is a bit more of a sideshow.
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