Maxar Technologies (NYSE: MAXR) has agreed to sell MacDonald, Dettwiler and Associates (MDA), its Canadian subsidiary, to Northern Private Capital (NPC) for $765 million pending regulatory approval, the company announced on Monday.
Maxar plans to reduce leverage and debts as well as improve its capital structure to prioritize investments for growth in its core areas of Earth Intelligence and Space Infrastructure.
CFO Biggs Porter commented, “This transaction, when combined with the recently completed sale of real estate in Palo Alto, reduces Maxar’s overall debt by more than $1 billion and significantly reduces Maxar’s leverage ratio.”
The transaction includes all of MDA’s Canadian businesses, encompassing ground stations, radar satellite products, robotics, defense and satellite components, representing approximately 1,900 employees.
Maxar projects the sale will generate $370 million in revenue and $85 million in adjusted earnings before interest, tax, depreciation and amortization (EBITDA).
“While the sale of MDA will re-baseline the size of the overall company, we continue to expect significant Adjusted EBITDA and Free Cash Flow growth over the next several years,” Porter added.
The completion of the sale is pending review from the Committee on Foreign Investment (CFIUS), Federal Trade Commission (FTC), and the Hart-Scott-Rodino Antitrust Improvements Act (HSR Act) in the U.S. as well as the Radiocommunications Act and Competition Act in Canada.
“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 defense and intelligence customers, the evolving requirements of civil governments, and the pursuit of innovation seen in the commercial marketplace,” said Dan Jablonsky, Maxar CEO.
About Maxar Technologies
Maxar is a trusted partner and innovator in Earth Intelligence and Space Infrastructure. We deliver disruptive value to government and commercial customers to help them monitor, understand, and navigate our changing planet; deliver global broadband communications; and explore and advance the use space.
Our unique approach combines decades of deep mission understanding and a proven commercial and defense foundation to deploy solutions and deliver insights with unrivaled speed, scale, and cost effectiveness.