Maxar Technologies Inc (NYSE: MAXR) stock surged 17.55% on July 2nd, 2019 and continued its momentum rising over 1.2% in the pre-market session of July 3rd, 2019 (Source: Google finance) after Italian aerospace and defense firm Leonardo SpA and France’s Thales SA are considering the joint acquisition of a space business from MAXR. The sale of the business, dubbed MacDonald, Dettwiler and Associates (MDA), could realise more than $1 billion and will help to pay Maxar’s $3.2 billion debt pile. Canada-based MDA is already a supplier to Thales Alenia Space, owned 67% by Thales and 33% by Leonardo, Profumo said, but he cautioned a deal was not guaranteed. Italian newspaper La Repubblica last month had reported that Leonardo and Thales were interested in MDA, without citing sources.
Thales Alenia Space on Monday was awarded a contract by Indonesia’s Ministry of Communication and Information Technology to design and manufacture a telecommunications satellite to be launched in late 2022. Leonardo was talking to the Indonesian government about several other products, Profumo said, including manned and unmanned maritime surveillance options, as it looked to step up its presence in the Asian market.
Meanwhile, Leonardo had last year signed a memorandum of understanding with Kangde Investment Group of China to develop, produce and assemble composite materials for the Chinese and Russian CR929 widebody commercial jet project. Profumo said the pair was interested in the work but a contract had not yet been awarded, noting rivals such as Spirit AeroSystems Holding Inc were also competing
On the other hand, MAXR has reported the consolidated revenues for the first quarter of 2019 of $504 million compared to $557 million for the same period of last year. The decline in revenues was mainly due to the Space Systems segment given lower GEO Comsat revenues and the expected wind-down of work on the multi-year RCM project, and a decrease in the Imagery Segment given the loss of the Company’s WorldView-4 satellite. For the quarter ended March 31, 2019,the company has reported the net loss of $59 million compared to net income of $15 million in the comparative period of 2018. The decrease is mainly due to a lower tax benefit, higher restructuring costs, and lower Adjusted EBITDA from the Imagery segment given the loss of the Company’s WorldView-4 satellite
Additionally, the Company had total order backlog of $1.9 billion as of March 31, 2019 compared to $2.4 billion as at December 31, 2018. Backlog declined primarily due to declines in backlog in the Space Systems and Imagery segments.