Small-satellite maker Terran Orbital Corp. (NYSE: LLAP) has received a $100 million investment from its largest customer, aerospace and defense contracting giant Lockheed Martin Corp. (NYSE: LMT), in a deal that’s expected to bring further work to Terran’s base in Irvine, where the company is already among the region’s fastest-growing tech-focused businesses.
Terran, based in Boca Raton, Fla., but with much of its operations in Irvine, last week said that it had entered into a deal “to pursue a wider variety of opportunities with Lockheed Martin,” which is boosting its stake in the company from around 9% to over 30%, according to regulatory filings.
Under the agreement, Terran will prioritize making satellites for Lockheed, and said it aims “to advance emerging technology across military, commercial, and civil customers.”
Terran was valued around $400 million as of last week, about a third of its market cap earlier this year, while Lockheed counts a valuation closer to $130 billion.
West Coast Move
The funds from the deal will be used “to acquire additional satellite assembly space, increase module production, and satisfy working capital needs while expanding advanced manufacturing abilities,” according to a company statement.
Terran emphasized that work will take place in Irvine, not Florida, where the company previously had ambitious plans for a $300 million satellite manufacturing plant along an area of the state dubbed the Space Coast.
Terran “advanced manufacturing capabilities, which were originally planned for expansion on Florida’s Space Coast in partnership with Space Florida, have been accelerated and will now be based in Irvine,” the company said.
The company, which went public this March, noted it “has added over 140,000 square feet in Irvine alone in the past 12 months.”
That expansion includes 89,000 square feet of office space at the Irvine Co.-owned 400 Spectrum Center tower, as well as manufacturing facilities along Barranca Parkway, near the city’s train station, where its previous brand name Tyvak was well known.
Its Irvine facilities are reported to have the capacity to build 250 satellites per year.
2,100 Jobs by ’25
The coastal shift could cost the Sunshine State hundreds of jobs.
In September 2021, Florida Gov. Ron DeSantis announced Terran’s plans for the $300 million investment at Merritt Island for the “world’s largest state-of-the-art commercial spacecraft facility.” Expected job creation: approximately 2,100 by 2025, according to reports at the time. The Florida facility was expected to run some 660,000 square feet.
Terran employed 312 people in Orange County as of August, according to Business Journal data. That’s up 121% from a year ago. It employs about 400 people companywide.
Whether the 2,100 positions cited for the Florida locations are ultimately added to Terran’s local operations remains to be seen; Marc Bell, the co-founder, chairman and CEO of Terran, told the Business Journal he had “no comment at this time” when asked for more details about the company’s plans in Irvine.
Terran is scheduled to release third-quarter earnings on Wednesday, Nov. 9.
There’s been no word on whether Terran plans to move its headquarters designation to Irvine.
Manufacturing Plans
“This makes sense for us right now because there is an immediate demand for satellites,” trade publication SpaceNews.com quoted CEO Bell as saying after the Oct. 31 deal with Lockheed was announced.
The conflict in Ukraine has highlighted the need for advanced satellite imagery.
Building an assembly line in Florida was projected to take three years while the expansion in Irvine will only take 12 months, Bell told the SpaceNews site. “For me to add on to that is far easier than trying to expand on another coast.”
The Lockheed announcement comes amid a shift in priorities for Terran, which said it plans “to no longer pursue its own constellation”—or grouping of various satellites. “We want to focus on manufacturing and not on being a satellite operator,” Bell told SpaceNews.
Instead, Terran indicated it plans to focus on providing a key satellite product—PredaSAR—“to those protecting and defending our nation and allies.”
Moon Work
Military work aside, Terran predicts there will be a market for thousands of satellites launched into orbit over the next decade, with the company rapidly gaining in stature for its space exploration work.
Terran provided the Lunar InfraRed (LunIR) spacecraft, a small satellite designed to inspect the moon’s surface temperature on the closely watched mission Artemis 1.
The spacecraft is called a “6u satellite” and is described as being “shoebox-sized”—ultra small compared to the bulkier satellites star watchers have been accustomed to seeing shot into orbit in the past.
The Lunar InfraRed imaging spacecraft, also known as LunIR, is the result of a joint effort between Lockheed Martin and Terran Orbital.
Artemis is targeted for launch on Nov. 14 after experiencing a delay from early September.
Regulatory filings indicate Terran had a $700 million contract with Lockheed to produce 42 satellites for the U.S. Space Development Agency.
