TAMPA, Fla. — Newly listed small satellite constellation operator Spire Global is buying Canadian ship-tracking company exactEarth in its first major acquisition, inflating expectations of more space consolidation amid a surge of companies going public.
Vienna, Virginia-based Spire, which provides data-gathering and analysis services in maritime and other markets with more than 110 Lemur satellites in low Earth orbit, is acquiring exactEarth for about $161.2 million through a mix of cash and stock.
The deal values exactEarth at just over nine times its total revenue over the last 12 months, the companies said in a Sept. 14 announcement.
Shareholders in exactEarth will own about 3.8% of Spire after the transaction, if at least two-thirds of them approve it during a meeting they expect to hold in November.
Spire has already got the support of around 60% of exactEarth’s shareholders, including its directors and officers.
Peter Mabson, exactEarth’s chief executive officer, will report to Spire CEO Peter Platzer under the plan, as exactEarth becomes a fully owned subsidiary of Spire.
“Peter and I share a vision about the opportunity for space-based maritime data and the digitalization of the global maritime industry, and I look forward to pursuing that vision together,” Platzer said in a statement.
“I have great respect for the highly experienced team at exactEarth and am excited to continue driving this digital transformation together, serving more customers with a more robust data and solutions platform.”
Cambridge, Ontario-based exactEarth was founded in 2009 to provide Satellite-Automatic Identification System (S-AIS) services to the global maritime industry.
Spire said the acquisition increases its customer base by more than 75%, adding over 150 S-AIS commercial and government customers across 39 countries.
Last year, exactEarth sold four of its satellites and associated ground stations and equipment to Australian startup Myriota, which uses them as part of a network for connecting internet-of-things devices.
The Canadian operator currently has 63 satellites in orbit and seven spares.
Spire said buying exactEarth gives it an indirect ownership stake in Myriota, providing another avenue for expansion in the fast-growing satellite-based IoT market.
Spire started trading on the New York Stock Exchange Aug. 17 after merging with NavSight, a special purpose acquisition company (SPAC).
The merger raised $265 million in cash for investing in sales, marketing and product development operations to expand globally.
SPACs, or blank check firms that offer companies a relatively speedy route to the public markets, are a growing trend among space startups.
Chris Kemp, CEO of small launch vehicle developer Astra that went public July 1 after a SPAC merger, expects a wave of acquisitions will soon join the trend.
Speaking at a Sept. 9 panel during the Satellite 2021 conference, Kemp said a round of consolidation could have decadelong implications for the satellite industry.
Peter Beck, CEO of recently listed Rocket Lab, told the conference that his company is considering several potential deals.
SPAC symptoms
Space companies marketing SPAC mergers to investors often point to a sizable increase in future revenues, and adding another company’s sales to the mix is one route to achieve this.
Payam Banazadeh, CEO and founder of synthetic aperture radar (SAR) satellite imagery startup Capella Space, said this is partly why space companies with SPAC mergers are generally looking for additional sources of revenue beyond their core products.
Speaking to SpaceNews about the space SPAC market in general, Banazadeh said: “You add more products … that somehow gets to more revenue, right?”
He said Capella is continuing to watch the SPAC activity in the industry from the sidelines.
“There aren’t that many companies out there that have real assets in space, products, generating revenue, delivering things — and so we feel like we have a lot of options,” he added.
“Unfortunately, some of the companies that SPAC’d didn’t have options and that’s why they SPAC’d.”
“And so it’ll be really interesting to see what happens to them, especially with this new market.”
Spire has a strategic partnership with Iceye, a Finland-based provider of SAR imaging satellites.