BlackSky buys Thales Alenia’s stake in LeoStella joint venture

WASHINGTON — BlackSky has acquired full ownership of small satellite manufacturer LeoStella, giving the remote sensing company greater control over the production of its next generation of imaging satellites.

During a conference call on November 7 to discuss third-quarter financial results, BlackSky announced that it had acquired the 50% stake in LeoStella that it did not already own from Thales Alenia Space, the other joint venture partner. The company did not disclose the financial terms of the deal.

According to BlackSky, the deal was completed on November 6. filing 10-Q with the US Securities and Exchange Commission. “We expect this acquisition will allow the company to improve control over its supply chain and Generation 3 manufacturing operations,” the company said in a document, which also did not disclose financial details of the deal.

Gen-3 are the next generation of satellites that LeoStella produces for BlackSky. The new satellites promise improved performance in terms of resolution and revisit rate over the company’s existing Gen-2 spacecraft, with additional capabilities such as shortwave infrared imaging and intersatellite communications. The company expects the core constellation to consist of at least a dozen such satellites.

During the conference call, Brian O’Toole, chief executive of BlackSky, said the first Gen-3 satellite was in the “final stages of testing” before it would be sent to New Zealand for launch at the Electron Rocket Laboratory. He did not disclose the satellite’s expected launch date, other than to say it will take place three to four weeks after dispatch.

He said acquiring the half of LeoStella that it does not own would improve production efficiency for future Gen-3 satellites. “To support our Gen-3 manufacturing goals, we have taken proactive steps to further optimize our Gen-3 supply chain and manufacturing operations, which includes the acquisition of our partner interest in LeoStella,” he said.

BlackSky, then part of Spaceflight Industries, announced the formation of the LeoStella joint venture with Thales Alenia Space in 2018. as part of a $150 million Series C round.. LeoStella opened a satellite production plant in the suburbs of Seattle in 2019, they will be used to produce both BlackSky satellites and satellites from other customers.

Although LeoStella did win business from other companies, for example, Loft OrbitalAnd sought to enter defense marketsBlackSky was its main client. An October 24 press release revealed that BlackSky and LeoStella have been jointly selected for program of the Space Development Agency, which entitles them to participate in future experimental satellite missions.LeoStella said it has delivered 23 satellites to date, 19 of which were in orbit. Most of them will be for BlackSky.

O’Toole did not say whether LeoStella would continue to sell satellites to third parties now that it is wholly owned by BlackSky. “At the moment, BlackSky is LeoStella’s main client. So we were essentially funding this business through our existing satellite manufacturing contracts,” he said. LeoStella’s focus will be “on scaling Gen-3 and optimizing those manufacturing operations,” he said.

It is noteworthy that Leo Stella website now redirects to BlackSky’s website, which makes no mention of satellite manufacturing capabilities.

O’Toole said in the earnings call that despite the buyout of Thales Alenia’s stake in LeoStella, the two companies will continue to work together. “Our partnership with Thales remains very strong,” he said. “We continue to collaborate globally to bring Gen-3’s capabilities to market in conjunction with their offerings.”

BlackSky reported revenue of $71.7 million in the first nine months of this year, up 22% from the same period in 2023. The company said it posted adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $4.3 million for the first nine months of the year, compared with negative adjusted EBITDA of $10.3 million in the same period last year. .

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