MDA Space is buying smallsat manufacturer Blue Canyon Technologies (BCT) for $620 million, a move that gives the Canadian company a much-coveted spot at the U.S. government's defense spending table.
Announced June 19, the all-cash deal sees MDA Space snapping up BCT from RTX, the parent company of Raytheon, with a closing expected by year's end pending regulatory nods - including a review by the Committee on Foreign Investment in the United States (CFIUS), because nothing says 'welcome to the neighborhood' like a national security screening.
BCT, founded in 2008 and acquired by Raytheon in 2020, builds smallsats and components, employs over 400 people across two Colorado facilities, and is projected to generate $160 million in revenue by 2026 (up from $115 million in 2023). It's also cash-flow positive, which is the corporate equivalent of having your financial cake and eating it too.
About 75% of BCT's revenue comes from defense work, a detail that clearly made MDA Space's execs salivate. 'Historically, we have served U.S. defense customers as a merchant supplier,' said CEO Mike Greenley. 'BCT advances this dynamic as it provides us with an established U.S. presence, proven program delivery to U.S. defense customers and a pathway to pursue classified work and compete for prime contracts in our own right.' In other words: they're getting a backstage pass to the world's most lucrative defense market.
Greenley didn't stop there, calling the acquisition 'a strategic foothold in the world's most important defense market,' which is a diplomatic way of saying 'we're now officially in the club.' There may also be opportunities to integrate BCT's products into MDA Space's own spacecraft, with Greenley noting that 'BCT actually is a candidate member of our current supply chain,' suggesting a synergistic embrace is on the horizon.
The deal fits MDA Space's M&A strategy, which Greenley summed up as looking for 'vertical integration opportunities' and 'geographic distribution, primarily in the United States or Europe.' As for why RTX decided to sell BCT, Greenley pleaded ignorance, saying he wasn't aware of any issues and that 'it seemed like it was just an asset that they wanted to be able to put out on the market.' RTX, for its part, didn't immediately respond to questions, because nothing says 'no comment' like radio silence.
This acquisition comes a year after MDA Space bought SatixFy, an Israeli satellite chipmaker, and Greenley didn't rule out more purchases, admitting the company has 'a strong short list of candidates' in both the U.S. and Europe. Because apparently, one foothold just isn't enough.