Lockheed Martin To Acquire Aerojet Rocketdyne, Strengthening Position As Leading Provider Of Technologies To Deter Threats And Help Secure The United States And Its AlliesAerojet Rocketdyne's Complementary Capabilities and Skilled Workforce to Enable Growth in Hypersonics, Tactical Missiles, Integrated Air and Missile Defense, Strategic Systems and Space ExplorationProvides Greater Value and Innovation for Customers by Integrating Critical Component of Supply ChainTotal Transaction Value of $4.4 BillionLockheed Martin to Host Analyst and Investor Webcast at 8:30 a.m. EST on Monday, Dec. 21, to Discuss the TransactionBETHESDA, Md., Dec. 20, 2020 /PRNewswire/ -- Lockheed Martin Corporation (NYSE: LMT) today announced it has entered into a definitive agreement to acquire Aerojet Rocketdyne Holdings, Inc. (NYSE: AJRD) for $56 per share in cash, which is expected to be reduced to $51 per share after the payment of a pre-closing special dividend. This represents a post-dividend equity value of $4.6 billion and a total transaction value of $4.4 billion including the assumption of net cash.As part of approving the transaction, Aerojet Rocketdyne announced a special cash dividend of $5 per share to its holders of record of common stock and convertible senior notes (on an as-converted basis, and revocable at its option through the payment date) as of the close of business on March 10, 2021, and payable on March 24, 2021."Acquiring Aerojet Rocketdyne will preserve and strengthen an essential component of the domestic defense industrial base and reduce costs for our customers and the American taxpayer," said James Taiclet, Lockheed Martin president and CEO. "This transaction enhances Lockheed Martin's support of critical U.S. and allied security missions and retains national leadership in space and hypersonic technology. We look forward to welcoming their talented team and expanding Lockheed Martin's position as the leading provider of 21st century warfare solutions."With 2019 revenue of approximately $2 billion, nearly 5,000 employees, and 15 primary operations sites across the United States, Aerojet Rocketdyne is a world-recognized aerospace and defense rocket engine manufacturer. Aerojet Rocketdyne has deep customer relationships and significant demand for its innovative technologies. The proposed acquisition adds substantial expertise in propulsion to Lockheed Martin's portfolio, and expands on the solid foundation built by Lockheed Martin and Aerojet Rocketdyne over many years. Aerojet Rocketdyne's propulsion systems are already a key component of Lockheed Martin's supply chain and several advanced systems across its Aeronautics, Missiles and Fire Control and Space business areas.The transaction is expected to close in the second half of 2021 and is subject to the satisfaction of customary closing conditions, including regulatory approvals and approval by Aerojet Rocketdyne's stockholders. Lockheed Martin has a history of successful integrations and will work to efficiently deliver the many strategic and financial benefits of this transaction. A transition team will be formed to allow for a seamless integration and ensure continuity for customers, employees and other stakeholders.Conference Call InformationLockheed Martin will host a live webcast on Monday, Dec. 21, at 8:30 a.m. EST to discuss this transaction. The webcast and relevant financial charts will be available for download on the Lockheed Martin Investor Relations website at www.lockheedmartin.com/investor.About Lockheed MartinHeadquartered in Bethesda, Maryland, Lockheed Martin Corporation is a global security and aerospace company that employs approximately 110,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services.Please follow @LMNews on Twitter for the latest announcements and news across the corporation.
Rocketdyne began as a division of North American Aviation, later part of Rockwell, which was merged into Boeing in 1996. Boeing sold Rocketdyne to UTC in 2005, who sold it (combined with Pratt & Whitney) to GenCorp in 2013, creating Aerojet Rocketdyne. Now it goes to Lockheed Martin. Martin Company used Aerojet engines for Titan. Convair (another Lockheed Martin predecessor) used Rocketdyne and Pratt & Whitney engines for Atlas and Centaur.
Why Lockheed Martin wants it now I can't imagine. They wouldn't pay $4.4 billion just to own RL-10. Would they? - Ed Kyle
Quote from: edkyle99 on 12/21/2020 03:24 amWhy Lockheed Martin wants it now I can't imagine. They wouldn't pay $4.4 billion just to own RL-10. Would they? - Ed KyleI think the RL-10 isn't the major part of their interest. They think there is big potential for hypersonic missiles for the DoD. I think that their main interest is in propulsion for these very expensive items.
Quote from: Eric Hedman on 12/21/2020 04:13 amQuote from: edkyle99 on 12/21/2020 03:24 amWhy Lockheed Martin wants it now I can't imagine. They wouldn't pay $4.4 billion just to own RL-10. Would they? - Ed KyleI think the RL-10 isn't the major part of their interest. They think there is big potential for hypersonic missiles for the DoD. I think that their main interest is in propulsion for these very expensive items.This. I doubt that the major deciding factor in this was the space industry.
Aerojet Rocketdyne's Complementary Capabilities and Skilled Workforce to Enable Growth in Hypersonics, [snip]
Notably, Lockheed Martin has also said in the past that its prospective SR-72 successor to the iconic SR-71 Blackbird would use a combined cycle engine arrangement that the company had been developing since the mid-2000s in cooperation with Aerojet Rocketdyne. There had also been talk about a fighter jet-sized demonstrator to prove out this technology, with former CEO Marillyn Hewson saying it could have a price tag of less than $1 billion.
AJR does $1.7 to $1.8 billion in revenue per year. RS-25 is pretty significant: https://spacenews.com/aerojet-rocketdyne-defends-sls-engine-contract-costs/RL-10 less so. Would suspect the main interest is in the missle stuff and hypersonics as said above by Eric.
AJRD also provides thrusters for in space propulsion to satellite companies. It's not just big launch vehicle engines.
From my (albeit biased) perspective, this acquisition is at least as much about the solid rocket propulsion part of Aerojet Rocketdyne as it is the rest of the portfolio. AJR is a subcontractor to LM on a lot of their missile products, THAAD and D-5 Trident II (second stage motor) being some of their larger missiles; I'm less familiar with the tactical catalog. Lockheed Martin recently announced it was partnering with AJR on their Next Generation Interceptor (NGI) offering to MDA to replace the Ground-Based Interceptor (GBI) element of the Ground-Based Midcourse Defense (GMD) system.To me this feels a little like the purchase of Orbital ATK by Northrop Grumman, which was seen by many observers[who? and why do they assume that?] as a way to get a cost advantage on rocket motors for GBSD, making it possible to edge out Boeing which ended up no-bidding the next phase of the development contract. NGI is at least an order of magnitude smaller, but it feels like an echo of that acquisition to me. But I may be living in an echo chamber...Personally, I wish LM well in this acquisition and hope it works out for them, and wish my colleagues at Aerojet's SRM business units the best of luck navigating the same sort of FTC-imposed firewall mandates and compliance audits that we have had to abide since 2018. I do worry that after a few years of the only remaining solid rocket motor manufacturers in the U.S. being fully owned by large defense prime contractors, that the FTC or an entity within DoD or GAO recommends breaking up the mono-/duopolies in order to revitalize competition. I don't want to be around if/when that happens...(Disclaimer: I am not an impartial observer. Comments are my own, not my company's.)
Lockheed Martin buys Aerojet Rocketdyne to better compete with Musk’s SpaceX, Bezos’ Blue OriginPUBLISHED MON, DEC 21 2020 5:03 PM ESTMichael Sheetz@THESHEETZTWEETZKEY POINTSLockheed Martin intends to acquire rocket engine and spacecraft propulsion maker Aerojet Rocketdyne in a deal that values the company at $4.6 billion.“This is clearly a vertical integration play for [Lockheed Martin] and a larger investment on Space,” Bank of America analyst Ron Epstein.Aerojet Rocketdyne recently identified both Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin as major competitors in the growing space industry.“We have seen SpaceX as an emerging threat [and] they are more than an emerging threat right now,” Lockheed Martin CFO Ken Possenriede said on the company’s third quarter earnings conference call in October.
“Near term, the benefit for Lockheed Martin is on the defense side … and then you’re buying some optionality in the space markets down the road, to ideally get more competitive and defend your position,”
