MacDonald, Dettwile & Associates (MDA) has purchased Loral Space & Communications’ commercial satellite unit for $875 million, pending regulatory approval. The move gives the Canadian MDA an US base and transforms the company into a major player in commercial communications.
“This is a game changing transaction for our Company,” said Daniel Friedmann, MDA’s president and CEO. “With one move, we are bringing together two market leaders to create a unique global communications and information company with a strong commercial focus. Post-acquisition, more than two-thirds of MDA’s total revenues will come from the commercial market.”
MDA is the responsible for Canadarm2, the robotic arm aboard the International Space Station. To-date its primary customer had been the Canadian government, which had blocked prior attempts to sell its satellite division to Virginia-based Alliant Techsystems.
Loral currently employs 3,200 people. It has delivered more than 240 satellites over its 50 year history.
Loral will continue to operate under its current name and management from its California manufacturing facility. The combined company will be worth $1.9 billion in annual revenues. “Now that it has a manufacturing base, MDA should theoretically be able to bid on larger orders that they weren’t able to bid on before,” said Aubrey Hearn, a fund manager at Sentry Select Capital Corp. in Toronto, which manages C$7.5 billion in assets and holds MacDonald Dettwiler stock. “Before they were bidding on some contracts and they would just get the design part of the contract.”
“Space Systems/Loral’s business is fundamentally driven by the worldwide demand for television, digital audio, broadband Internet, mobile communications, and voice telephony,” said Friedmann. “Billions of people around the world depend on these services and demand continues to increase. By acquiring one of the major companies that enable these essential communications services, MDA will move immediately to the forefront of this growing business.”