Space Venture Exits

[Joe Landon]

Let's use this forum to talk about past and present liquidity events in the space industry. Here's one to start:

Wall Street Journal Article: Space Data Corp + Google

Google is looking at Space Data Corp in AZ. They launch high-altitude ballons that serve as "cell towers" airborn comm platforms. It will be interesting to see if google wants to aquire Space Data Corp as part of its entry into wireless services or just award a contract of some kind.

Space Data Corp website

[Burton Lee]

Hi Joe, I posted this article on the Space Angels blog a couple of days ago...do you subscribe? Ive contacted Space Data, talked to their investor relations guy here in DC, and hope to talk to their CEO shortly...Burton

[Guillermo Söhnlein]

This is a GREAT topic, since much of our success as entrepreneurs rests with convincing investors (esp. early-stage angels and VCs) that there are potential exits to be had in space-related businesses. So ... why don't we try using the "Wisdom of Crowds" approach to generate as comprehensive a list as we can (we can worry about quantifying the total opportunity later)?

I'll get this going with some basic obvious U.S. examples, but perhaps our friends outside the U.S. could provide additional global examples?

Generally, most investors gain a return upon a liquidity event, which most often is an IPO or an acquisition. Let's break our data points down in that way:

IPO
- XM Satellite Radio
- Sirius Satellite Radio
- DirecTV
- Lockheed Martin
- Boeing
- Orbital Sciences
- SpaceHAB
- Loral

M&A
- Scaled Composites (acquired by Northrop Grumman)
- KeyHole (acquired by Google)
- AeroAstro (acquired by Radyne)
- Space Imaging (merged with OrbImage into GeoEye)

That should be enough to get the discussion going. What other exits can we use as data points?

[Rocky Persaud]

XM Satellite Canada (aka Canadian Satellite Radio Holdings Inc.) did an IPO a few years ago.

[Guillermo Söhnlein]

It dawned on me after I posted this reply that what we're really saying here is that it may be time to update the 1997 Outlook: State of the Space Industry report that was prepared by KPMG, SpaceVest, and others. Since we have some folks in this community who worked on this, I was wondering (a) can we get someone like, say, KPMG or Accenture to create a 2008 Outlook report and (b) does anyone know where we can find an online version of the original 1997 Outlook report (I can't seem to find one)?

[Kevin Leclaire]

Guillermo,
The Space Foundation has taken over the original SpaceVest report including a lot of the industry research and modeling I performed while at SpaceVest (although they have made some changes to my industry models). They published The Space Report 2006 as the follow-on and a free update in 2007:
http://www.spacefoundation.org/news/story.php?id=410 or www.thespacereport.org. A more comprehensive annual update will be released in April 2008. I have written the sections on the Space Foundation Index for each of these 3 reports, although I haven't focused overmuch on exits, I do address those companies that have IPO'd that have been added to the Index (you need to add GeoEye, Orbcomm, Globalstar and Hughes as four of the more recent IPOs).

[Guillermo Söhnlein]

Right! Thanks for reminding me about the Foundation's (your) work on this. I'll look at the report again in detail over the weekend and jump back in afterward.

[Burton Lee]

Guillermo, The Space Foundation approached me last Summer about contributing to their 2008 Space Report in the area of angel finance...have not since heard from them on their plans for this...

[Guillermo Söhnlein]

Other IPOs:

- Trimble Navigation
- Magellan Aerospace

[Joe Landon]

There is also:

- Starsys (bought by SpaceDev)
- Swales Aerospace (bought by ATK)
- pending sale of MacDonald Dettwiler and Associates to ATK

+ there are a lot of small space companies being bought up by the big defense companies. Northrup and DRS were both very aquisitive over the last few years. Jeffries Quarterdeck lists 14 pages of aerospace deals on thier website - not all "space" deals, but still relevant info.

[Burton Lee]

Actually, we cover exits and other deals on the Space Angels Network blog on a regular basis (spaceventures.blogspot.com). :-) I highly recommend it as a great source of current deal flow in both aviation and commercial space (but cannot guarantee completeness at this point however....)

Some recent exits of interest that we have covered (including aviation/UAVs) include:

MicroSat - Sierra Nevada
Athena Technologies, Inc. - Rockwell Collins
Adam Aircraft bankruptcy :-)
Perceptek - Lockheed Martin
Payload Systems - Aurora Flight Sciences