Space-tech firm MDA back in Canadian hands with $1B sale to investors including Balsillie

The space technology firm behind the iconic Canadarm is returning home after being bought by an investor group that includes prominent business leaders John Risley and Jim Balsillie.

The $1-billion deal to acquire MDA — once-known as MacDonald, Dettwiler and Associates — from Colorado-based Maxar Technologies Inc., will see the company’s headquarters move back to Canada, the group said.

Balsillie, the former co-CEO of BlackBerry Inc., is also expected to take a seat on the company’s board of directors.

MacDonald, Dettwiler and Associates, the creator of the Canadarm, is being sold. MacDonald, Dettwiler and Associates

Northern Private Capital, an investment firm connected to Risley, who co-founded Clearwater Fine Foods, is leading the transaction, which comes amid a spike in interest in space-based technologies.

“We think that the space sector has got a real tailwind behind it, and we think that this company is as well-positioned as any to capitalize on that in a more diversified way,” Andrew Lapham, NPC’s chief executive, said in an interview with the Financial Post on Monday.

A source close to the acquisition said that separating MDA from Maxar will give the space technology firm more room to pursue partnerships with other companies active in the rapidly growing sector.

In the past few years, the price to launch a small satellite into low earth orbit has come down dramatically, opening up new business opportunities, leading to a flood of new players in space.

Elon Musk’s SpaceX is building an array of satellites known as Starlink, which are supposed to provide internet services from space, while founder Jeff Bezos has a rocket company, Blue Origin.

Earlier this month, Bloomberg reported that Apple Inc. also has a team working on satellite technology for sending data directly to iPhones. Adding to the buzz, U.S. President Donald Trump recently signed a defence spending bill to formally create a U.S. Space Force.

A group of investors including billionaires John Risley, left, and Jim Balsillie, right, are buying MDA. Sándor Fizl for the National Post/Getty Images

Lapham said the investment group plans to leave the company’s current leadership in place, with MDA group president Mike Greenley remaining in his role.

Balsillie, he said, would join the board once the transaction closed.

“We are thrilled to have Jim in the ownership group. He’s going to take a seat on the board of the company and we think his expertise and his understanding of how to grow technologies and how to grow global businesses, we think it’s invaluable here,” Lapham said.

Balsillie has been a champion for the Canadian tech community in recent years, helping to foster homegrown companies through the Council of Canadian Innovators, which he helped found. He has also been one of the loudest voices warning about the risks caused by foreign ownership of big tech.

Lapham said the group is buying MDA because they think it is an exciting business, but noted that the ability to repatriate the company was an added bonus.

“You wouldn’t do it just for national pride, but we’re thrilled to bring this company back to Canada,” he said.

In 2017, MDA merged with DigitalGlobe in a deal that resulted in the company headquarters moving to Colorado, with the combined entity adopting the name Maxar Technologies.

That deal came after a proposed sale to U.S.-based Alliant Techsystems Inc. in 2008 was blocked by then-industry minister Jim Prentice, who invoked a provision in the Investment Canada Act for the first time ever.

A spokeswoman for Industry, Science and Innovation Minister Navdeep Bains welcomed Monday’s announcement, and touted the government’s plans to spend $2.6 billion on a space strategy.

“We’re hopeful that MDA continues to build on its strong track record of innovation in robotics and satellite communications to create jobs, opportunities and made-in-Canada innovation,” press secretary Dani Keenan said in an email.

Maxar’s stock price was up more than 15 per cent on the news of the sale, which was likely driven by the announcement that the proceeds would be used to pay down the company’s sizeable debt.

In addition to the issues with debt, Maxar has been struggling in recent years, with declining orders for geostationary communications satellites.

In October of 2018 the company’s stock took a hit of more than 45 per cent after an earnings miss, which the company attributed to fewer orders for the GEO comsat division.

Source: Financial Post