Potential sale of ULA

[HVM]

I don't like it, most of the value for parents was in the Atlas and this lowers my confidence to Vulcan and BE-4.

How does that work?  It is the same people that are working Atlas and Vulcan.

Not the Russian ones. It's not tanks and avionics, it's 5% variation in turbomachinery that is considered be in spec.

Of course successful maiden flight soon would correct many worries, (and get better price.. ; )

[TheRadicalModerate]

The Artemis III ICPS is still in Decatur, so they haven't reassigned everybody.  If Boeing wanted to re-purpose the DCSS for new tasks, the obvious solution would be to transfer essential personnel for building more DCSSes to Boeing, along with the tooling and the IP.

Not true.   The tanks and structures were made long ago.  No reason for those skills to be retained. Wiring harness people have likely moved on.   All that would remain is integration types that would spend more time on other vehicles.     Again, there are no dedicated DCSS people to transfer.

They don't have to be dedicated DCSS people.  They only have to be people with enough DCSS institutional memory to be able to reconstruct the line and perform sustaining engineering.  You have all the tooling.  You have all the jigs.  You have all the intellectual property.

However, there's obviously no reason to go to all this trouble (and I grant you that it's a non-trivial amount of trouble) unless there's a continuing use for the DCSS.  Which returns me to my original (and still unanswered) question:  What's Boeing doing on National Team Mk II if they aren't providing a a transfer element for its HLS architecture?  And if they are providing a TE, could it reasonably be based on anything other than the DCSS?

Note that a DCSS can't just be used as-is as a TE.  It doesn't have the power or boiloff duration required.  That would have to be added into the system somehow.  But starting from an existing stage is a zillion times easier than starting from scratch--especially if you're Boeing, with a very limited bench of in-house talent to do anything these days.

[Vahe231991]

The Artemis III ICPS is still in Decatur[/url], so they haven't reassigned everybody.  If Boeing wanted to re-purpose the DCSS for new tasks, the obvious solution would be to transfer essential personnel for building more DCSSes to Boeing, along with the tooling and the IP.

Not true.   The tanks and structures were made long ago.  No reason for those skills to be retained. Wiring harness people have likely moved on.   All that would remain is integration types that would spend more time on other vehicles.     Again, there are no dedicated DCSS people to transfer.

The ICPS stage for the SLS slated for Artemis III will undergo high-pressure test checks this spring at Decatur, and once those are complete, that stage will leave Decatur.

[RedLineTrain]

ULA might be untouchable for Blue.  It's a union shop.

[Newton_V]

I think the possibility of BO buying ULA is almost zero.  They march to the beat of their own drummer, much like Space X.  If they were interested, it would have been a few years ago. 

I can see NGIS, or maybe even Boeing, but it seems odd that LM or Boeing would want to buy out the other half.

I guess there's always the possibility of some other entity, but still seems easier/cheaper to buy launch services than the entire business.

[TheRadicalModerate]

I think the possibility of BO buying ULA is almost zero.  They march to the beat of their own drummer...

I would accept "They undulate slowly to the rhythm of their own snail foot," but what you have here sounds way too intentional to be descriptive.

ULA might be untouchable for Blue.  It's a union shop.

If the biggest organizational problem Blue has is that they have to deal with a union, their management will have improved by a factor of ten.  Getting Tory might get them a factor of five, though.

[Darkseraph]

Blue Origin may buy ULA out just to buy access to the national security market and instantly get rid of a competitor, more than any technology it may have. Companies buy out competitors all the time, then gradually shut down the product like that was previously a competitor. Not long ago, Blue lost competitions for access to the DoD market, NASA lunar missions and for engines for the Vulcan upper stage. Government demand for launch is always going to be there even when the commercial market declines cyclically, so its a nice guaranteed revenue stream that's protected from foreign competitors. With tensions with Russia and China accelerating, demand for launches from that market are in fact likely to massively increase.

Initially they would offer Vulcan and New Glenn as two options to the government/commercial customers and gradually phase out the former. The transaction costs for the acquired company could be lower as they would be selling BE-4 engines to themselves and could then replace the upper stage engines for Vulcan with BE-3 or BE7 derivatives.

Owning ULA would also increase access to revenues from NASA, which buys quite a lot of launches from ULA. Vehicles currently launched by Atlas V / Vulcan would then be transitioned to New Glenn too, for example, Starliner, Dreamchaser and Cygnus. More share of constellation launches like Kuiper may be of interest to them too. Reducing launch competition overnight would also give more bargaining power over price with regard to access to things like Orbital Reef. Their crew vehicle will be years away, so that project will have to rely on third party crew and cargo.

With ULA bought, it would also then own access to additional launch pads, a highly coveted resource that could then be converted to be used for New Glenn and future vehicles. Institutional knowledge of working with the government has some value, and it's been a huge sore spot in the past when BO has bid and been marked badly.

Some of the Centaur/ACES technology might be of some interest to them as well as research on distributed launch but it would be far down the list of reasons.

[meekGee]

You know, the OP said "... three sources confirmed to Ars that potential buyers have been contacted about the opportunity."

"Buyers", plural.

So I have to wonder than - does "potential buyer" mean that they are actively interested?  Or just that the sellers think that they'll be interested?

[abaddon]

Saudi Aramco anyone?

I imagine there will be some restrictions on any buyer due to the US Govt’s interests though.

[Asteroza]

You know, the OP said "... three sources confirmed to Ars that potential buyers have been contacted about the opportunity."

"Buyers", plural.

So I have to wonder than - does "potential buyer" mean that they are actively interested?  Or just that the sellers think that they'll be interested?

They think they have multiple potential suitors. Hopeium is a powerful drug...


But something about all this smells.


The running argument is an integrated vertical corp is the only game in town now, demonstrated by SpaceX/Starlink. Especially if you're looking for a big new profit source, not just breaking even due to acquisition loan payments. Otherwise you're just prey for activist investors and private equity firms like Blackrock.


Kuiper being Amazon internal and not a subsidiary welded at the hip to Blue Origin if not wholly owned by BO was always suspect. Amazon could have been a contracted anchor customer of Kuiper easily but it isn't, thus they shot their own foot. Kuiper backstopping a satellite IoT system connected directly to your house via an evolved form of those Amazon Dash buttons would make a consumer purchasing platform based on a predictive logistics system, which would turn Amazon into an absolute gigaunicorn as it owns global logisitics.

ULA and thus Vulcan, have the problem of using an engine from a competing launcher, not from an independent rocket engine specific manufacturer like Aerojet. Not owning the engine outright means loss of control and no vertical.

Lockheed had pursued Aerojet but got blocked due to Raytheon. If Lockheed had succeeded, then went after ULA, then it could have made sats but still would have needed to buyin/buyout a sat constellation. Or being the driving force in building up the SDA constellation, which is functionally similar if it was fully expanded (but gets into a knifefight with Starshield). But with Vulcan engines beholden to BO now, it would require yet another redesign to go "in-house" with someone else's engines from an acquirable rocket engine maker (Dynetics?). So, no vertical even with ULA in hand.

Boeing on the other hand is neck deep in sats, with some investments in constellations which they could convert to ownership. License the DiscSat design for an alternative flatpack sat design. They could also try to chase the SDA constellation wave while fighting Starshield, and the general Starlink competition with something (Telesat buyout?). Aerojet purchase might be still achievable. But Boeing still gets stuck on Vulcan being beholden to BO until an engine swap redesign.

Google is in bed with Starlink so they won't go for the killer vertical if they have a sweetheart deal.

Apple just dumped a lifeline loan to Globalstar, so they are not afraid to a prop up a constellation supplier. But note the supplier term there. Apple is well known to substantially invest in suppliers to gain exclusive access to near-term in-development components that could enhance the iPhone (remember the big investment in an artificial sapphire maker for potentially indestructible front glass). To really cement a global iPhone ecosystem hegemony, Apple needs a direct to cellphone 5G constellation service supplier to provide near-exclusive cellular service (to be rolled into their existing Apple SIM MVNO service). Spacemobile or Lynk.Global, with investment, could fit the bill, but they need launch services. If Apple did a joint venture/SPAC thing to grow an integrated vertical space 5G constellation with launch, and merge it with ULA to get Vulcan, that's a potentially workable plan in a reasonable timeframe. But that still doesn't solve the Vulcan engine problem unless they also acquire Aerojet and dump BO for engines.

From the integrated vertical argument perspective for any other buyer, you need a constellation almost right now, which drives using Vulcan right now, which suggests ULA will have to eat using BO engines for the life of Vulcan. You might be able to bank on ULA going straight into parallel development of a full reusable TSTO if you put a fire under Tory Bruno and totally unleashed him though (especially if ULA is pulled in private and no longer a public company)(Tory unchained with laser eyes would be a good meme).

[russianhalo117]

Saudi Aramco anyone?

I imagine there will be some restrictions on any buyer due to the US Govt’s interests though.

Due to NSSL payloads ULA will be seeking USA domestic buyers subject to potential vetting by the US government to ensure they meet the requirements for their NSSL missions presently under contract and those inthe future.

[TrevorMonty]

You know, the OP said "... three sources confirmed to Ars that potential buyers have been contacted about the opportunity."

"Buyers", plural.

So I have to wonder than - does "potential buyer" mean that they are actively interested?  Or just that the sellers think that they'll be interested?

They think they have multiple potential suitors. Hopeium is a powerful drug...

 But that still doesn't solve the Vulcan engine problem unless they also acquire Aerojet and dump BO for engines.

ARJ AR1 engine was RP1 and only half developed. Would really need reuseable methane engine, means redesign of AR1 which would take quite a few years. On plus side ARJ shouldn't have a problem designing a replacement for NG supplied GEM63-XL SRMs.

[TheRadicalModerate]

If BO purchased ULA, could the Vulcans Centaur V be used as a New Glenn third stage?

FWIW, here's a Silverbird computation of a New Glenn as-is with a Centaur V as a third stage, sending a payload to TLI (C3=-1.5km²/s²).  These numbers are for an expendable launch, because I'm too lazy to figure out how to trick Silverbird into simulating a reusable system.

New Glenn numbers are very tentative, with more than a few guesses.  Centaur 5 numbers are fairly accurate.

The thing that should cause the most suspicion is that the T/GLOW of the whole stack is barely 1.2, which means that the gravity losses are going to be very large.  When I guessed that total delta-v to LEO for the system would be 9800m/s (very high), I got 19.5t to C3=-1.5, using my spreadsheet, which doesn't even attempt to simulate a trajectory, but can simulate a reusable system.  (You just guess on total dv to LEO and go from there.  Reusability is based on a linearization of F9 data.)

For comparison, the NASA LSP performance calculator gives 7.1t to TLI.  I assume that's a reusable New Glenn.

All-in-all, C5 as a third stage can't be dismissed out of hand.  Whether it'd be worth buying all or part of ULA and then doing a fair amount of work to adapt the C5, I can't say.

[jongoff]

Fingers crossed this is positive long-term for ULA.

Worth noting that many mergers or acquisitions are not successful. Also I fear the sellers may ultimately be focussed on price? However, given the potential national security implications, I assume that will ensure ULA very much remains a going concern and is strengthened rather than weakened.

Having had a few of my own recent M&A "learning experiences"... yeah, while it would be hard for a change in ownership to be worse than their current ownership situation, it's far from impossible. And unfortunately, many of the entities likely to have the cash to buy ULA are the very ones I'd be most worried about finding some way to be worse than their existing parents. Fingers crossed. I've loved working with ULA's advanced concepts team over the past decade and a half, and would love to see them owned by someone who saw them as something worth fighting to keep competitive.

~Jon

[arachnitect]

You know, the OP said "... three sources confirmed to Ars that potential buyers have been contacted about the opportunity."

"Buyers", plural.

So I have to wonder than - does "potential buyer" mean that they are actively interested?  Or just that the sellers think that they'll be interested?

My theory is that the parents have an interested buyer that ULA really doesn't like, so Tory is scrambling to find an alternative.

The looming tragedy here is a leveraged buyout by private equity. Parents get cash. ULA gets loaded up with debt, new owners do what they can to cut costs and collect rent for a decade with captive customers on Atlas and Vulcan. If the next generation of rockets is able to claim their market, ULA goes bankrupt and is sold for scrap.

ULA's most valuable asset isn't IP or real estate or institutional knowledge, it's an order book full of captive customers, and the value of that asset peaks the day after Vulcan's first successful mission.

[TheRadicalModerate]

Kuiper backstopping a satellite IoT system connected directly to your house via an evolved form of those Amazon Dash buttons would make a consumer purchasing platform based on a predictive logistics system, which would turn Amazon into an absolute gigaunicorn as it owns global logisitics.

Amazon's already 99% of the way to being a logistics gigaunicorn, because people who buy lots of stuff already have internet, and any IoT gizmos already swim in a sea of 5G.

My understanding of why they thought Kuiper was a good idea was because there are lots of synergies with AWS, including integrating heavily compute-intensive applications in remote regions.  That's something that is maybe a little forward-looking right now (except for the military, which would buy lots of it as soon as it became available), but it's probably a pretty interesting business long-term.  (You could also do clever things with content distribution networks like this, which is a non-trivial portion of long-haul internet traffic.)

ULA and thus Vulcan, have the problem of using an engine from a competing launcher, not from an independent rocket engine specific manufacturer like Aerojet. Not owning the engine outright means loss of control and no vertical.

If ULA doesn't have first-position rights to all of Blue's BE-4 assets and staff in the event of a bankruptcy, and an ironclad contract that allows them to seize everything if Jeff even has a funny dream about not delivering all the engines that ULA can take, then Tory isn't the CEO most of us seem to think he is.  I just don't think this is an issue.

From the integrated vertical argument perspective for any other buyer, you need a constellation almost right now, which drives using Vulcan right now, which suggests ULA will have to eat using BO engines for the life of Vulcan.

If it's not using BE-4's, then the life of Vulcan is over and something has taken its place.

I think what you're driving at, however, is that every launch provider now needs an anchor customer with enough cadence to drive economies of scale as far as they can go.  It doesn't have to be a vertical application that the provider owns (although that's a very nice place to be if you can swing it), but you need somebody who:

1) You trust is in it for the long haul and has a biz plan on which you're willing to bet the farm.

2) Is contractually committed to use your services forever, or at least long enough that you can see the end coming far enough in advance that you can go hunting for a replacement.

I don't think that Kuiper satisfies this requirement for either ULA or Blue alone, but together they're on pretty solid ground.  This is the main reason why I think Blue is the most likely purchaser.

BTW, I think SpaceX is about to have two anchor applications:  Starlink for now, but in the not-too-distant future, methalox for whomever wants to buy it.  Yet another reason why being in the launcher business for everybody whose name doesn't start with an 'S' and end with an 'X' is in for very tough sledding.

[TheRadicalModerate]

The looming tragedy here is a leveraged buyout by private equity. Parents get cash. ULA gets loaded up with debt, new owners do what they can to cut costs and collect rent for a decade with captive customers on Atlas and Vulcan. If the next generation of rockets is able to claim their market, ULA goes bankrupt and is sold for scrap.

Your last sentence is why this isn't likely to happen.  The PE guys would be interested if they could strip the company for parts, but the parts are largely useless.  And the launch biz itself is... OK... but it's not a 50% ROI the moment that the deal closes, which is what those guys want.

ULA's most valuable asset isn't IP or real estate or institutional knowledge, it's an order book full of captive customers, and the value of that asset peaks the day after Vulcan's first successful mission.

By contemporary standards, it's not that thick an order book.  And the not-so-firm parts of it have a dicey present value, because they're going to come under intense pricing pressure, which gets worse as the launch dates get further away.

[Asteroza]

ULA and thus Vulcan, have the problem of using an engine from a competing launcher, not from an independent rocket engine specific manufacturer like Aerojet. Not owning the engine outright means loss of control and no vertical.

If ULA doesn't have first-position rights to all of Blue's BE-4 assets and staff in the event of a bankruptcy, and an ironclad contract that allows them to seize everything if Jeff even has a funny dream about not delivering all the engines that ULA can take, then Tory isn't the CEO most of us seem to think he is.  I just don't think this is an issue.

I was arguing from a vertical cost perspective as BE-4's being sourced externally means they don't get cheaper by your own efforts (well, aside from SMART). Vertical integration's big merit is being able to control costs.

From the integrated vertical argument perspective for any other buyer, you need a constellation almost right now, which drives using Vulcan right now, which suggests ULA will have to eat using BO engines for the life of Vulcan.

If it's not using BE-4's, then the life of Vulcan is over and something has taken its place.

I think what you're driving at, however, is that every launch provider now needs an anchor customer with enough cadence to drive economies of scale as far as they can go.  It doesn't have to be a vertical application that the provider owns (although that's a very nice place to be if you can swing it), but you need somebody who:

1) You trust is in it for the long haul and has a biz plan on which you're willing to bet the farm.

2) Is contractually committed to use your services forever, or at least long enough that you can see the end coming far enough in advance that you can go hunting for a replacement.

I don't think that Kuiper satisfies this requirement for either ULA or Blue alone, but together they're on pretty solid ground.  This is the main reason why I think Blue is the most likely purchaser.

BTW, I think SpaceX is about to have two anchor applications:  Starlink for now, but in the not-too-distant future, methalox for whomever wants to buy it.  Yet another reason why being in the launcher business for everybody whose name doesn't start with an 'S' and end with an 'X' is in for very tough sledding.

Yes, ideally, the anchor customer ideally is yourself like SpaceX/Starlink/Starshield, but it might not be an absolute requirement for vertical integration cost management, as long as launcher/sats/ops is under one contiguous level of control. An unfortunate factor is that extends to the payload manufacture to an extent as well. See Rocketlab diversifying into host bus work in support of small constellations that can potentially launch individually on Electron now but prefer Neutron.

BO buying ULA does have the half step of New Glenn (a partly reusable TSTO, pending any realization of Project Jarvis) being a successor to Vulcan for the combined concern, and gives some breathing room to NG to mature a bit more while Vulcan is doing grunt work now (if NG becomes a full reusable TSTO).


If the high cadence anchor customer is a future minimum requirement for a mostly vertically integrated company to be successful, then you face either a commercial case problem (megaconstellation of some type, commercial propellant services+depot, something big mass like a big module based commercial station being rapidly expanded/built, commercial SPS), or a big government mandate problem (government megaconstellation like the SDA one, strategic propellant reserve, honest to god moonbase push, government SPS). But this presupposes an anchor customer.
BO up to now has been doing the "Build it and they will come" approach (which faces the chicken and egg problem of creating a commercial heavy lift market). Well, unless you believe Bezos can singlehandedly fund/start a commercial moonbase with the remaining fortune he has (to be fair that might be an anchor customer of sorts for an SPS if he's delivering solar cells from regolith). SpaceX has been feeding itself so it doesn't face the chicken/egg paradox directly, and becomes a tide that lifts all boats as it makes viable infrastructure for any other orbital customer contemplating big mass.

The interesting exception is if you can combine multiple small anchor customers with moderate cadence requirements into a virtual large anchor customer for your order book, rather than go fight in the big leagues of megaconstellations. RocketLab might be able to pull that off, but ULA has too much baggage to "go small".

You look at the last time we got close to this sort of big serial production, and one usually thinks of the early Atlas ICBM production line feeding a big military order, and the USSR making the R-7 with its Soyuz descendants.

There's also the underlying economic question of when do megaconstellations switch over from expendable sats to accreting persistent platforms with ever larger antennas. Do they accrete by simple docking, or is there some sort of Spiderfab equipped OTV mixed in?

[darkenfast]

You know, the OP said "... three sources confirmed to Ars that potential buyers have been contacted about the opportunity."

"Buyers", plural.

So I have to wonder than - does "potential buyer" mean that they are actively interested?  Or just that the sellers think that they'll be interested?

My theory is that the parents have an interested buyer that ULA really doesn't like, so Tory is scrambling to find an alternative.

The looming tragedy here is a leveraged buyout by private equity. Parents get cash. ULA gets loaded up with debt, new owners do what they can to cut costs and collect rent for a decade with captive customers on Atlas and Vulcan. If the next generation of rockets is able to claim their market, ULA goes bankrupt and is sold for scrap.

ULA's most valuable asset isn't IP or real estate or institutional knowledge, it's an order book full of captive customers, and the value of that asset peaks the day after Vulcan's first successful mission.

Question: In a situation like this, does Tory Bruno have any input into this? Is he even allowed access by the owners to information about a possible sale?

Being a peasant, I have no idea how these things work!

[LastWyzard]

Tory is almost certainly involved.  It is likely that one or both owners want out and he has been given the assignment of finding a new owner.  The first thing he would do is put together a team to get the ball rolling.  It is even possible that Tory went to Boeing and LM and initiated the idea.  He is a very experienced, savvy businessman and may see new ownership as the best path forward for ULA.