L3Harris Technologies has announced the sale of a majority stake in its civilian space propulsion unit to private equity firm AE Industrial Partners for $845 million. This move is part of L3Harris’ strategy to sharpen its focus on the defense sector, aligning with the Department of War’s (DoW) vision for a more agile industrial base.
In a statement issued on the day of the announcement, Chairman and CEO Christopher Kubasik emphasized the company’s commitment to enhancing its alignment with DoW priorities while continuing to deliver value to shareholders and customers. The deal involves the sale of a 60 percent stake in the space propulsion business, with L3Harris retaining approximately 40 percent ownership.
Details of the Transaction
The civilian space propulsion unit is known for its contributions to NASA and civil space initiatives. Its technologies include nuclear power systems intended for future lunar and Martian missions, as well as the RL10 engine, which powers the upper stage of United Launch Alliance’s Vulcan heavy rocket. Notably, the transaction does not include the RS-25 rocket engine, which serves as the primary propulsion system for NASA’s Space Launch System, designed to support the Artemis mission aimed at returning humans to the Moon.
AE Industrial Partners, which has a history of investing in commercial space companies such as York Space Systems and Firefly, will rebrand the acquired unit as Rocketdyne. This name pays homage to the firm’s storied legacy and innovation in space propulsion technologies.
Future Plans for Rocketdyne
In comments regarding the acquisition, Kirk Konert, managing partner at AE Industrial, highlighted the significance of Rocketdyne in the history of U.S. space propulsion. He stated, “Rocketdyne is more than just a company; it is the birthplace of U.S. rocket propulsion.” He added that the transaction aims to modernize the production of the RL10 engine by introducing modern manufacturing practices.
This strategic shift by L3Harris highlights the growing emphasis on military contracts in the defense sector. As the company seeks to consolidate its resources and expertise, it aims to better serve the evolving needs of national defense while still maintaining a foothold in the commercial space industry.
The deal is expected to not only invigorate Rocketdyne but also foster a hybrid model of collaboration that merges the stability of a national defense contractor with the innovation brought by specialized investors. As L3Harris moves forward, its focus remains on enhancing military capabilities while ensuring the continued advancement of space technologies.
