WASHINGTON \u2014 MDA Space is buying smallsat manufacturer Blue Canyon Technologies (BCT) for $620 million, giving the Canadian company greater access to the lucrative U.S. government market.<\/p>\n
MDA Space announced June 19 that it would buy BCT from RTX, parent company of Raytheon, in an all-cash deal. The deal is expected to close by the end of the year pending regulatory approvals, including a review by the Committee on Foreign Investment in the United States, or CFIUS.<\/p>\n
BCT, founded in 2008 and acquired by Raytheon in 2020, builds smallsats and smallsat components. It has more than 400 employees in two Colorado facilities. It is projected to generate $160 million in revenue in 2026, up from $115 million in 2023, and is cash-flow positive.<\/p>\n
In a call with analysts, MDA executives described the acquisition as a strategic move to allow the company to win more business from the U.S. government, particularly in defense. About 75% of BCT\u2019s revenue comes from defense work.<\/p>\n
\u201cHistorically, we have served U.S. defense customers as a merchant supplier,\u201d said Mike Greenley, chief executive of MDA Space. \u201cBCT 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.\u201d<\/p>\n
\u201cThis is a strategic foothold in the world\u2019s most important defense market,\u201d he added.<\/p>\n
There may also be opportunities to incorporate BCT\u2019s products into MDA Space\u2019s own spacecraft. \u201cBCT actually is a candidate member of our current supply chain,\u201d Greenley said. \u201cThat\u2019s going to be an interesting synergy to explore for us as we go forward.\u201d<\/p>\n
The deal, he said, fits into the company\u2019s plans to grow through mergers and acquisitions. \u201cWe\u2019ve been clear the last two to three years that in M&A, we will always look for two things. One would be vertical integration opportunities to be able to pull key technologies from our supply chain into the business to increase control over our pipelines, and the second would be for geographic distribution, primarily in the United States or Europe.\u201d<\/p>\n
Greenley said he did not know why RTX decided to sell BCT, only that MDA Space became aware of the sales process and got involved. RTX did not immediately reply to questions about why it decided to sell BCT.<\/p>\n
\u201cIt seemed like it was just an asset that they wanted to be able to put out on the market,\u201d he said, noting he was unaware of any issues that might have prompted RTX to sell it.<\/p>\n