TORONTO — The company that built the robotic Canadarm for the U.S. Space Shuttle and International Space Station programs is returning to Canadian ownership in a $1-billion deal announced Monday.
A consortium led by Toronto-based Northern Private Capital with financial backing from former BlackBerry co-chief executive Jim Balsillie and others will acquire all Canadian and U.K. operations of the former MacDonald, Dettwiler and Associates.
The group says MDA’s corporate headquarters will return to Canada, where it employs more than 1,900 people.
“Over its 50-year history, MDA has grown from a B.C.-based start-up into a world-class space technology company and an anchor of Canada’s space program,” said John Risley, the Halifax billionaire who founded Clearwater Fine Foods and is a principal with investor Andrew Lapham in Northern Private Capital.
“We are thrilled to partner with (group president) Mike Greenley and the rest of the MDA team and are excited about the significant growth potential we see for the company,” he said in a statement.
“As a Canadian, I am so proud this iconic Canadian company will once again be owned and controlled in Canada.”
MDA is also known for having developed Radarsat Earth-observation satellites and other advanced space technologies.
In a separate news release, Maxar CEO Dan Jablonsky said the Westminster, Colo., company will use proceeds from the sale to reduce debt and make growth investments in its core areas of Earth intelligence and space infrastructure.
“After the transaction is complete, Maxar will retain leading capabilities in geospatial data and analytics, satellites, space robotics and space infrastructure, and we will continue to have strong alignment with our defence and intelligence customers, the evolving requirements of civil governments and the pursuit of innovation seen in the commercial marketplace,” Jablonsky said.
Maxar shares, which are listed on both the Toronto and New York stock exchanges, rose by as much as 22.8 per cent or C$4.27 at an intraday high of C$22.98. The stock gave up some of its gains to trade at $21.90 about 1 p.m.
MDA is expected to continue to supply components and subsystems to Maxar when the deal concludes and the companies have agreed to continue to sell each other’s complementary satellite data, Maxar said.
It said MDA’s Canadian businesses are estimated to have generated about C$485 million in revenue and C$110 million in adjusted earnings in 2019, with the revenue including about C$100 million of intercompany sales to other Maxar entities.
Maxar Technologies was created in 2016 during the merger of then Vancouver-based MDA with Colorado-based DigitalGlobe, a producer of high-resolution Earth-imagery products.
The deal to repatriate MDA’s Canadian operations will be financed by a combination of equity from sources including NPC, Balsillie and Senvest Capital, along with debt from providers including Scotiabank and Bank of Montreal.
Northern Private Capital said the acquisition of MDA is expected to close in 2020 following regulatory approvals.
This report by The Canadian Press was first published Dec. 30, 2019.
Companies in this story: (TSX:BMO, TSX:BNS, TSX:SEC, TSX:MAXR)
The Canadian Press