Redwire, a small space company formed last year through acquisitions, is merging with the special purpose acquisition company (SPAC) Genesis Park Acquisition Corp. [GNPK] in a deal that will give it a cash infusion and open the company to new investors by going public.
The transaction values Redwire at $615 million and the announcement shed light on the private company’s top and bottom-line metrics. Sales this year are expected to be $163 million, and estimated to grow a whopping 72 percent organically to more than $1.4 billion in 2025. Operating earnings are also forecast to explode nearly 1,200 percent from $20 million estimated in 2021 to $250 million in 2025, according to an investor presentation given by Redwire and Genesis Park.
The company also has more than $150 million in contracted backlog, with 67 percent of estimated sales this year already in backlog.
Organic growth during the next five years will be led by the commercial sector, accounting for more than $500 million in sales, followed by the national security sector, which will approach $500 million, and finally the civil sector with $202 million, Bill Read, Redwire’s chief financial officer, said during the presentation.
The pending deal is expected to add $170 million to Redwire’s balance sheet, enabling it to accelerate investments in research and development, capital expenditures, and continue to acquire other companies.
Peter Cannito, Redwire’s chairman and CEO, said that the company’s financial strength and “rapidly growing contract backlog…gives us the confidence we will achieve our projections.”
Headquartered in Jacksonville, Fla., Redwire is a portfolio company in the private equity firm
AE Industrial (AEI) Partners, which will remain a significant shareholder after going public.
AEI formed Redwire in June 2020 through the acquisitions, and merger, of Adcole Space and Deep Space Systems, creating a platform for a number of acquisitions that followed, most recently in February when it acquired Deployable Space Systems, a supplier of deployable solar arrays and other space structures. In total, Redwire is the combination of seven companies it has pieced together with the help of AEI.
Cannito said the company’s spate of acquisitions has made it the “acquirer of choice for many space entrepreneurs,” adding there are plenty more deals to be had.
Although a small company, Redwire has a rich heritage in space flight through the companies it acquired, having flown on more than 150 civilian, military and commercial satellite missions dating back over 50 years. In addition to the deployable solar arrays, which will be used by NASA this year to upgrade the solar arrays on the International Space Station, Redwire has capabilities for 3-D manufacturing in space, robotics, camera systems, guidance and navigation control systems, and other components for a wide range of customers.
“This highly differentiated position of bringing together 50 years of flight heritage and disruptive innovations make us the premier provider of infrastructure that can enhance every space mission of the future in the commercial, civil as well as national security space market,” said Cannito, who is also an operating partner with AEI.
Redwire said its organic growth prospects are fueled by a $23 billion-plus market of “identifiable” opportunities for national security, civil and commercial customers, highlighting that the global space economy was valued at $420 billion in 2019 and is projected to reach $2 trillion annually by 2040, noting that 6,000 satellites were on orbit a year ago with more than 50,000 new satellites expected to be launched by 2030.
The company plays in key growth sectors, launch and exploration, in-space mobility, earth observation, and satellite communications. Its main focus areas are on-orbit manufacturing and assembly, low earth orbit commercialization, digitally-engineered spacecraft, space domain awareness, and advanced sensors and components.
In the commercial sector, growth is being generated by companies “providing increased data communications and remote sensing applications from large commercial satellite constellations” and in the national security sector by demand for resilient architectures exemplified by distributed constellations of small satellite in low earth orbit, Cannito said. He also highlighted “renewed interest in human space exploration…driving tremendous growth in the civil sector.”
Redwire believes its ability to combine 3-D manufacturing and robotic assembly in space will create new growth drivers the same way new low-cost entrants for launching rockets into space have transformed the industry.
“Typically, you have to engineer satellites to fit into the rocket and survive a violent ride to space, rather than optimizing them for their mission,” Andrew Rush, president and chief operating officer of Redwire, said during the presentation. “But by combining large-scale 3-D printing and robotic assembly, we at Redwire are able to put on orbit more capability per dollar than the current state-of-the-art design paradigm. In the same way that reusable rockets have transformed the $5 billion space launch industry, we are now transforming the $15 billion satellite manufacturing industry.”
Rush highlighted the company’s Archinaut One with NASA that will demonstrate the manufacture and assembly of satellites on orbit. The program is due to launch in 2023 and “will accelerate the growth of on-orbit assembled manufactured and serviced satellites,” he said.
The merger with Genesis Park is expected to close by the end of June, at which point Genesis Park will change its name to Redwire and trade on the New York Stock Exchange. At closing, Redwire’s existing shareholders will own about 55 percent of the stock. Additional private investors that have joined the transaction are contributing $100 million and include Senvest Management and Crescent Park Management.
Redwire’s board will include Cannito, Reggie Brothers, who leads AEI’s data analytics platform company BigBear.ai, Joanne Isham, Kirk Konert, Jonathan Baliff, John Bolton, and Les Daniels.