Who can change the situation in the industry and lead the space launch industry?
Last year, news of the possible exit of ULA parent companies Boeing and Lockheed Martin from the rocket business caused widespread resonance. And last week, ULA CEO Tory Bruno gave a presentation at a conference that featured slides that looked like they were taken from an M&A (Mergers & Acquisitions) presentation.
In December, it became known about three contenders for the purchase of ULA – Jeff Bezos's space launch company Blue Origin, investment giant Cerberus and aerospace contractor Textron. However, since then there has been no information about priority offers or the refusal of any of the potential buyers. Even the successful debut of the ULA Vulcan rocket in January did not affect the development of the situation.
ULA has been valued at $2 billion over the past decade, and experts say a sale makes sense. However, the deal should have been closed much earlier, since SpaceX already dominates the global market and has supplanted ULA as the leading supplier to the US military. Therefore, it is important to find a new owner who can simplify ULA's structure and invest in innovation.
ULA's owners initially asked for more than $4 billion for the company, but a reasonable estimate for the sale is in the range of $2 billion to $2.5 billion. Competition in the market for heavy launch vehicles, including the Vulcan, has increased over the past ten years, but this rocket is only now beginning to be used.
Textron expressed interest in purchasing ULA to expand its systems business. Some experts warn that buying such a company could be a risky way to enter the space industry, even to compete with leading defense companies. However, given that Textron also bid for rocket engine company Aerojet Rocketdyne, which was eventually sold to another company, the deal would be Textron's most significant acquisition to date.
Blue Origin has also expressed interest in buying ULA, but the deal has its own controversy. On the one hand, Blue Origin has an existing relationship with ULA, but it is focused on other, non-rocket related projects, such as the New Glenn rocket launch. However, cooperation between these companies has its advantages, including investment opportunities, established relationships and employment in the heavy launch market.
Cerberus is seen as the most likely buyer of ULA, as private investors have the opportunity to optimize costs and management, as well as accelerate Vulcan's development. There are now also favorable market conditions for combining debt and equity offers. Moreover, Cerberus has a reputation for working with government and national security businesses, and they take a disciplined approach to acquiring companies. However, some experts doubt that ownership of ULA will allow Cerberus to achieve the innovations it needs to compete with SpaceX, especially with the launch of the Starship rocket.
In the ULA sale process, some experts are raising the possibility of a surprise buyer, especially in light of the lack of visible progress since the launch of the Vulcan rocket. Bids that depend on the rocket's successful debut should have been moving forward a long time ago, and a buyer seeking financing would likely become more active in negotiations.
The fate of ULA remains unclear, but the possibility of a suitable buyer is of great interest, especially given the task facing the new owner — compete with the giant SpaceX.