Lockheed Martin Finalizes $450 Million Acquisition of Satellite Maker Terran Orbital, Strengthening Role in Commercial Space

Lockheed Martin Corp has completed its $450 million acquisition of Terran Orbital, marking a strategic expansion into the small satellite sector and solidifying its presence in the commercial satellite market. The acquisition brings Terran Orbital, now rebranded as “Terran Orbital, a Lockheed Martin Company,” under the aerospace giant’s wing. Terran will continue to operate as a merchant supplier, providing its expertise to the wider space industry while leveraging Lockheed’s extensive defense and engineering resources.

This acquisition culminates a collaboration that began in 2017, when Lockheed Martin Ventures made its first investment in Terran Orbital. Over the years, Lockheed incrementally increased its stake, gaining about one-third ownership by 2022. The partnership has seen both companies join forces on various military projects, including a low Earth orbit (LEO) satellite initiative led by the Space Development Agency, along with technology demonstrations aimed at bolstering national defense capabilities.

Terran Orbital, originally founded as Tyvak Nano-Satellite Systems in 2011, shifted its focus in 2022 from nanosatellites to larger satellite platforms, aiming for broader commercial applications. This reorientation, which was catalyzed by Terran’s public listing through a SPAC merger, helped the company to carve out a niche in efficient, low-cost satellite manufacturing. The acquisition by Lockheed represents an opportunity for Terran to stabilize its finances after a challenging year marked by cash flow constraints. In March, Lockheed had proposed an initial buyout of $1 per share, but financial and valuation concerns led to a renegotiated deal at $0.25 per share, along with an assumption of Terran’s outstanding debts.

Lockheed Martin Space President Robert Lightfoot welcomed the integration of Terran Orbital’s resources and expertise, stating, “We welcome their ingenuity and dedication to ensuring mission success, and we’ve always valued those aspects of our working relationship.”

Revolutionizing Satellite Production with Automation

Lockheed is particularly interested in Terran Orbital’s advancements in satellite manufacturing automation. Chris Moran, head of Lockheed Martin Ventures, highlighted how Terran Orbital’s automation has set a new standard in the production cycle, achieving efficiencies in building satellite buses and components that Lockheed aims to integrate into its own production lines.

“Terran Orbital has created a lot of automation around certain build cycles that I think we can benefit from, even on satellites that we make,” Moran said, adding that their processes have automated traditionally manual steps, enhancing speed and precision in manufacturing.

The acquisition is expected to enhance Lockheed’s ability to support both military and commercial satellite missions, with Terran’s experience in cost-effective and efficient satellite production well-aligned with Lockheed’s defense contracting strengths. This blend of Lockheed’s contracting expertise with Terran’s automation and engineering could accelerate timelines and optimize costs for future satellite programs.

Expanding Lockheed’s Reach into Commercial Space

With satellite manufacturing facilities in California, Florida, Georgia, and an international base in Torino, Italy, Terran Orbital offers Lockheed Martin a geographically diverse footprint. This acquisition marks Lockheed’s latest move in a series of efforts to expand its capabilities in the commercial space market, which is seeing rapid growth fueled by demand for cost-efficient satellite solutions across industries.

For Lockheed Martin, the acquisition comes as the commercial space market continues to evolve, with companies and government agencies around the world seeking more flexible, scalable satellite platforms. As demand grows for both military and commercial applications, this acquisition positions Lockheed to compete more effectively with companies like SpaceX, Rocket Lab, and others capitalizing on the need for efficient satellite solutions.

Lockheed’s deeper involvement with Terran Orbital underscores its commitment to bolstering the United States’ position in the rapidly advancing space industry and could drive further innovations in satellite manufacturing for years to come.

Jane Hillman
Financial Desk