Andrew Rush, Chief Operating Officer of Redwire, shows former NASA administrator Jim Bridenstine a spacecraft model from subsidiary Made In Space.
Space infrastructure conglomerate Redwire Space is preparing to go public, announcing Thursday that it will be the latest in a line of space companies to join forces with a SPAC.
Redwire, which was founded last year by the private equity company AE Industrial Partners, is merging with the special purpose vehicle Genesis Park, which operates under the ticker GNPK. The transaction is expected to close at the end of the second quarter. The merger results in the listing of Redwire on the New York Stock Exchange.
A SPAC is essentially a shell company that raises money through an IPO to buy another company.
“If you look around the industry now, you have many older traditional aerospace companies and many of these new aerospace companies, many of which are ahead of sales,” Peter Cannito, chairman and CEO of Redwire, told CNBC.
“Redwire is a kind of hybrid: We offer this middle ground of enormous flight heritage, but also the disruptive technologies.”
The company focuses on space infrastructure, which is currently valued at a market of $ 15 billion.
Redwire’s corporate collection includes technologies such as navigation sensors, solar systems, deployable structures, space manufacturing, and robotic arms.
The conglomerate expects to add around $ 170 million in cash to its balance sheet through the merger. This would include the proceeds of a PIPE or private investment in public equity of $ 100 million, in which investors Senvest Management and Crescent Park will participate.
The merger values Redwire with a company valuation of $ 615 million, according to the company. Cannito noted that as the largest single shareholder, AE Industrial Partners will “remain heavily invested” after the merger.
Redwire’s year of acquisitions
Since AE founded Redwire last June, the company has been on a steady acquisition course.
Redwire first acquired the Adcole Space satellite components business and aerospace company Deep Space Systems, and then made In Space, a 3D printing specialist.
The conglomerate has also acquired satellite technology company Roccor, engineering service LoadPath, modular spacecraft maker Oakman Aerospace and Deployable Space Systems company for satellite mechanisms.
Overall, according to Redwire, the combined management teams have more than 50 years of space experience with over 150 missions.
“We have taken a very differentiated approach to the market by combining different companies with exceptional aviation heritage,” said Cannito.
These companies are “used to being the primary mission partner for organizations that provide space-based functionality,” he added, regardless of whether those partners are NASA, the Pentagon or others.
Redwire believes more deals may be imminent, Cannito said, noting that the IPO and “public equity as a currency will greatly increase our attractiveness as an acquisition platform.”
“This allows us to be opportunistic and to continue our already proven track record in mergers and acquisitions,” said Cannito. “I think we’re going to try to achieve some bigger goals and this gives us the opportunity, with the flexibility to do so as needed.”
In 2021, revenues are projected to exceed $ 160 million
Redwire posted revenue of $ 119 million last year, which is expected to increase to $ 163 million in 2021. The company predicts sales will accelerate to over $ 1.4 billion by 2025, based on its products, according to Cannito.
“The dollars can go from government to trade, and then our profile will swing with our customer mix. That gives us a lot of staying power. It allows us to be flexible and to adapt and change as the market changes,” said Cannito.
Redwire is positive cash flow and expects its profitability to continue and free cash flow to grow to nearly $ 200 million by 2025.
“Our strategy is really to be that leading mission partner,” said Cannito.
A composite image showing a Falcon 9 rocket booster taking off and landing near the launch pad a few minutes later.
Cannito also highlighted the reduction in the cost of access to space, as well as the growing number of rocket makers launching into orbit as an additional catalyst.
“We’re very excited and have great respect for what SpaceX did in introducing an economical reusable launch. We’re also excited to see all of the other launch vendors who have entered this space and now and as the result of increased competition has the launch cost There are many options now, “said Cannito.
“I believe there is a direct link between the reduction in launch costs and the demand for space infrastructure,” he added.
Overall, Cannito positioned his company as a company in the midst of the space industry, which has grown to over $ 420 billion.
“If space wins, Redwire wins,” said Cannito.