Small Aerospace Companies - Space Activities in North America and Europe

SPECIALISTS IN SATELLITE, MEDIA AND TELECOM INVESTMENT BANKING

Ian Fichtenbaum Associate 646-290-7794 [email protected] Hoyt Davidson CEO and Partner 212-551-7960 [email protected]

See Last Page for Important Disclosures Member FINRA

January 2009

Key Takeaways: 1. Aerospace markets are dominated by a limited group of

customers and very large competitors. Nevertheless, growth opportunities for smaller firms are abundant.

2. Small aerospace companies are a vibrant and important

source of industry innovation and value creation. Small companies are active at all levels of the value chain.

3. Eventually, small companies face challenges to growth,

profitability and shareholder liquidity after they reach a certain scale.

4. Industry consolidation plays an important role in

evolution of these companies and is an important part of allowing new technologies and platforms to access wider markets.

5. Founders and senior management should focus some

time understanding their strategic and financial options.

6. Investment highlights and value proposition:

Recession resistant. High credit quality customers. Significant barriers to sustained entry Strong government support and contracting

preferences Committed management and employees Sector ripe for consolidation

Small Aerospace Companies Space Activities in North America and Europe

January 2009 Page 2 of 50

ABOUT NEAR EARTH LLC

For more information about our current transactions or about Near Earth LLC, please visit our website at www.nearearthllc.com or contact us at our location below:

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Table of Contents Executive Summary ..........................................................................................................4 Investment highlights and value proposition .....................................................................5 Introduction .......................................................................................................................6 Focus ................................................................................................................................7 Markets .............................................................................................................................8

Civil Space ....................................................................................................................9 Trends and Issues...................................................................................................11 Market opportunities................................................................................................12

Defense and Intelligence.............................................................................................13 Trends and Issues...................................................................................................15 Market opportunities................................................................................................16

Commercial Space......................................................................................................17 Trends and Issues...................................................................................................17 Market opportunities................................................................................................19

The Space Activities Value Chain ...................................................................................20 Contracting..................................................................................................................21 Lifecycle patterns of small aerospace companies: Growth & Exit...............................23 Patterns of consolidation.............................................................................................24

Notable aerospace companies: Capability tables ...........................................................26 Capability table: Mission services and support companies.........................................26 Capability table: Smallsat companies .........................................................................26 Capability table: Components and subsystem companies..........................................27 Company size and capability descriptions ..................................................................28

Company Geography......................................................................................................29 Activities ..........................................................................................................................30

Small satellites ............................................................................................................30 The Cubesat............................................................................................................31

Mission support services and products .......................................................................31 Components and subsystems.....................................................................................32

Conclusion ......................................................................................................................34 Notable small aerospace companies ..............................................................................35

Companies involved in small satellites........................................................................35 Companies providing mission support services and products ....................................36 Companies developing satellite components and subsystems...................................40

Notable transactions .......................................................................................................46 Companies involved in small satellites........................................................................46 Companies providing mission support services and products ....................................47 Companies developing satellite components and subsystems...................................48


Executive Summary Although the aerospace industry is dominated by a small group of large companies, there is a sizeable and diverse universe of small aerospace companies engaged in space activities. These smaller aerospace companies are engaged in all elements of the value chain and provide critical and innovative components, subsystems and mission services to large prime contractors as well as to end user operators. In this whitepaper, we seek to develop a greater understanding of the contributions of smaller companies to space missions and operations in North America and Europe. In doing so, we will demonstrate and elucidate the market for products and services for space activities and place the role of smaller companies within each market in context. Primarily, they emanate from three customer bases: 1) civil space, 2) defense and intelligence, and 3) commercial space. In all three customer bases there exist great and growing opportunities for small firms to participate in large aerospace projects. Particularly in government markets, numerous programs exist to facilitate growth, technological innovation and participation by smaller companies. Even in commercial markets trends in satellite size and cost, as well as the use of new materials, are encouraging smaller players to emerge. To effectively serve and execute market demand, the value chain for aerospace activities is oriented around prime integrators (companies that integrate whole systems), subsystems developers (companies or groups that develop whole subsystems, such as communications or power systems), component developers (companies or groups that develop components, such as motors or antennas) and, finally, providers of mission support and services. Small companies are active at all parts of the value chain, particularly with regards to developing innovative or distinctive components. We will show that numerous missions have included many critical components and subsystems from smaller companies. Despite the promising landscape, small companies face challenges to sustainable growth, profitability and shareholder liquidity. Small companies face the daunting challenge of competing against the largest aerospace firms once they have grown too large for special government programs. Moreover, founders often lack the resources to expand their company into different areas of competency and may wish to exit once their company becomes large and mature enough. Thus, industry consolidation plays an important role in evolution of these companies by placing smaller, innovative teams into the hands of organizations that can develop and market their capabilities on a larger scale and more effectively. Founders and senior management should continuously update their strategic and financial options and consider how their firm stands within the value chain and where synergies could exist through potential acquisitions. Moreover, they should seek to understand the opportunities and advantages of being acquired by larger organizations that will appropriately value their unique capabilities and their position in the marketplace.


Investment highlights and value proposition

Recession resistant. Government involvement in the economy is on an upswing. Aerospace sector should show continued growth and provide some protection from slower growth in the general economy.

High credit quality customers. Revenues tend to come from government departments or agencies or larger aerospace companies, so customer credit quality is quite high.

Significant barriers to sustained entry. While it is relatively easy to start a small aerospace company, it is much harder to grow one to sustained profitability and critical mass. Those that reach this level have attracted a highly educated workforce, often possessing valuable security clearances for defense and intelligence work, with specialized skills and relationships with government officials and/or large aerospace company customers. These companies have also generally developed leading-edge intellectual property as a result of technology research and development that serves as a major competitive factor.

Strong government support and contracting preferences. Small companies have access to government assistance programs and awards, such as set-asides, bidding preferences, research awards and technology transfer programs. At an early stage, this growth capital is available free of equity dilution making future financing rounds less complicated.

Committed management and employees. Founders and key employees tend to be loyal, enthusiastic and really believe in their mission.

Sector ripe for consolidation. Investors and participating companies face a highly fragmented sector comprised of 100s of sub-scale companies many of which have valuable assets, people and technologies. Synergies and cost savings from business combinations are often readily available.


Introduction The aerospace industry, in all its forms and incarnations, has rarely been known to think small. Go to an aircraft hanger, or to a launch pad and you will see some of the most complicated machinery that mankind has laid claim to producing. With immense complexity come immense organizations and armies of specialists and engineers. There is good reason for this – the aerospace industry’s products are sought out to probe and experience the extremes of our environment and of human capability, to survive great temperature changes, intense radiation and body slamming accelerations, and to travel astronomical distances and sometimes even return home. Building machines that accomplish these tasks requires a wide breadth of specialized expertise, impressive systems engineering skills, superb manufacturing precision and attention to detail and integration and testing of parts, components and subsystems from long, multi-tiered supply chains – all of this while maintaining high standards of safety, security, reliability, quality, and sometimes even cost control. Given these challenges, it is little wonder that great quantities of resources – of time, energy, brains and capital – are often required, as well as superior political astuteness and connections, to compete in the top tier of the space industry. Large projects over long time spans and with significant initial outlays will naturally flow to those few prime aerospace contractors that have the engineering, management and financial capabilities to weather the challenges inherent in them. Over time, this has had the natural, and perhaps unfortunate, effect of bringing about significant consolidation, to the point where prime aerospace contracting is now dominated by a handful of leviathan-scale firms and consortiums, notably Boeing, Lockheed Martin and Northrop Grumman in the U.S. and EADS Astrium and Thales Alenia Space in Europe. Underneath this top tier of leviathans compete smaller prime contractors and major subcontractors such as Space Systems/Loral, Ball Aerospace, L-3 Communications, ITT, Orbital Sciences, Harris Corporation, MacDonald Dettwiler and RUAG Aerospace as well as others. These large aerospace companies contribute significantly to the advancement of man’s exploitation and exploration of space, but they do so generally through focusing their resources on solving the real world, right now problems of their government, military, and commercial customers. This frequently means that systems design, integration, testing and operation of space systems is comprised largely of the technologies, equipment and subsystems developed by smaller, often more entrepreneurial, firms. In-house innovation is not always a top priority for the Boards and shareholders of the larger firms and where it is given serious attention accomplishing such innovation within these massive corporate organizations has sometimes proved challenging. We at Near Earth believe that some of the smaller firms, however, are doing amazing things and have great growth prospects deserving of investors’ attention. Others may even become the prime contractors of tomorrow. For the most part, these smaller players have been obscured by the shadows of giants. It is thus our goal to bring to light some of these smaller players, with particular attention to those up-and-coming companies that have left the comfort of their garages and basements to create businesses with between 30 and 500 employees. An absolute treasure of work is being done at this level in many exciting niches, and we wish to acquaint our readers through an overview of the action and the players.


This whitepaper is therefore meant to serve to introduce and exposit the rich field of smaller-sized firms, examining first the market landscape as we see it and then delving deeper into the major niches to find the small-sized stars that we see as thriving in a difficult industry. We hope you will follow along with us and find utility in our attempt to make sense of the thriving undergrowth of the aerospace industry, in all its promising diversity.

Focus The theme of this whitepaper concerns space activities by small aerospace companies in North America and Europe. Regionally, this includes the US, Canada and the members of the European Space Agency, most of whom are located in Western Europe. As for our definition of a small company, we have elected to include those firms which employ between 30 to 500 full or part-time staff substantially devoted to the design, fabrication, testing, integration or support of components, subsystems or missions involving aerospace applications. Our intention is to give attention to a wide range of smaller companies, from growing and entrepreneurial ventures, to more mature yet still independent firms. Attention will be given to the major markets for space activities, discussing the opportunities and trends for small companies in the civil, defense and intelligence as well as the commercial markets. Further, we describe the value chain as it relates to space and satellite manufacturing, space systems development and mission support as well as the major lifecycle patterns and acquisition drivers for these small firms. Finally, we list and briefly summarize many small firms in our ‘Activities’ section, with focus on companies within three horizontals: 1) mission support and service companies, 2) components and subsystem developers, and 3) companies that service the small satellite market. Although this first Near Earth aerospace whitepaper is focused on space activities and the two regions of North America and Europe, future whitepapers may focus on other important areas of activity in the realm of aerospace as well as other regions. Much activity is occurring outside of North America and Europe, and we would be remiss for ignoring the important work occurring in such countries as Japan, Russia, Israel, China, Brazil, India and many other places around the world. Further topics may examine companies and activities within civil and military aeronautics and aviation, intelligence and information systems or within the launch and missile systems sectors.


Markets Demand for space-related aerospace activities comes primarily from three distinct customer bases: 1) civil space agencies, 2) defense services and intelligence agencies and 3) commercial satellite operators. What follows is a brief description of each, following into a longer discussion further into this whitepaper: Civil Space: Civil space consists of programs, primarily sponsored by governments, to research and explore space and to find and develop non-military applications of space for the benefit of their citizens or mankind in general. These usually include programs of science (such as missions to other planets as well as space observatories and laboratories) and exploration (such as human missions to Earth orbit, the Moon and perhaps later in this century, Mars and the asteroids). Non-military applications also include meteorology, which has found a continuing application in Earth weather monitoring and forecasting as well as climate research. Defense and Intelligence: Defense and intelligence systems include space projects carried out under the specifications of militaries and intelligence agencies for their use. Primary demands of this market include secure global satellite communications, surveillance and reconnaissance, navigation and tracking, missile and anti-missile systems, counter-space and anti-satellite systems as well as near space (high atmospheric) aeronautics. Commercial Space: Commercial space consists of the diverse range of activities carried out in support of for-profit revenue-generating activities using space. Primarily, the customers for Satellite Operators who own or operate one or more satellites for the provision of media and telecommunications (in the form of transponder leasing, direct broadcasting, or two-way communications), remote sensing (in the form of imaging and geographical/meteorological data) or navigation services. Supporting the above three end-user markets are two significant secondary commercial space markets: (1) Satellite Manufacturing and Launch Providers who build and place into orbit the various satellite systems, and (2) the Ground Segment, comprised of companies that (i) design and manufacture satellite communications equipment or antennas, (ii) produce software for satellite communications or operation, (iii) integrate or operate satellite communications or control facilities, and (iv) provide a wide range of engineering and other services to support satellite operations. While the number of participants in the first category is relatively small, the ground segment category is comprised of hundreds of small businesses. Small aerospace companies are very active in providing components, subsystems and services to both these segments of the commercial space market.


Civil Space Civil space activities have been famously associated with the exploits of the national agencies, such as NASA, NOAA, NSF, ESA or the Canadian Space Agency. These have been, for better or worse, the headline grabbers and the organizations whose budgetary power has enabled some of the most cutting-edge advances in aerospace technology. For the most part, what we call civil space consists primarily of government sponsored programs. Although often given an expansive mandate of research and exploration, civil space activities include much of the following:

Human spaceflight operations: the developing, implementing and operation of vehicles and systems to facilitate human presence and exploration in low earth orbit, the moon or other planets.

Earth observations: enabling Earth sciences and observations through the implementation and operation of orbiting platforms. Some of the key work has involved studies of atmosphere and climate, oceans and ecosystems as well as geographic and topological studies of our earth.

Space science: includes sending missions to other planetary bodies as well astronomical observatories of deep space.

Aeronautics: research and development into aviation systems. The scale of many of these projects has often meant that larger groups have been given the lead for implementing most missions. However, smaller players also have played significant roles supporting larger missions, either through provisioning of unique components, subsystems, or engineering and managerial support services. The side photos illustrate this very nicely. Below we present a photo of the Rock Abrasion Tool that is deployed on each of the two Mars Exploration Rovers. The RAT was designed, built and tested by Honeybee Robotics, a 50 person company located in, of all places, midtown Manhattan. The Honeybee team has leveraged these and prior successes to also provide components and subsystems for the Mars Phoenix Lander

and the Mars Science as well as a variety of robotic applications for extreme terrestrial environments. Shown above to the right is the Lidar vision system for the Shuttle robotic arm. This system was developed by the Neptec Design Group, an 80-person group based out of Ottawa, Canada. Neptec has built a long history serving as a NASA prime subsystem contractor (among many other applications of its innovative vision systems). The civil agencies, either by government policy or out of need for the services not provided by large firms, have gone out of their way to provide an official outlet for firms like Honeybee and Neptec. The following table presents major programs intended to engage with small business.

The Rock Abrasion Tool (RAT), built for NASA’s Mars Exploration

Rovers by Honeybee Robotics Source: Honeybee Robotics

Neptec Design Group’s Lidar sensor aboard the Space Shuttle robotic arm Source: Neptec Design Group


Agency Country

Space Budget Space activities and programs for small business

Activities

Exploration: Constellation (Ares, Orion, Altair), lunar science and surveillance missions Operations: operations of the International Space Station, Space Shuttle Science: Planetary exploration, Mars exploration (Phoenix, MSL, MER) Observatories (Hubble, James Webb Telescope, Chandra), Earth Sciences (Jason, Aqua, Aquarius) Aeronautics: Aeronautics research and testing, Airspace systems, Aviation safety

NASA USA

$17.3 billion

Programs

Office of Small Business Programs operates a variety of programs, some general to US government agencies, some particular to NASA. These include: NASA Mentor-Protégé Program – pairing program to allow smaller companies to gain knowhow and experience from participating larger companies Small Business Set-Asides – procurements reserved for bidding by small businesses. Section 8(a) Business Development Program – awards under the Small Business Administration programs to benefit smaller businesses Women-owned, Veteran-owned, HubZone – procurements available to ensure equal opportunity for businesses owned by women, veterans or in underdeveloped regions IPP – Innovative Partnerships Program – many projects, including

SBIR / STTR – grants made for smaller research and development projects IPP seed fund – bridge funding to enable larger partnerships and development

projects Centennial Challenges – competitive prizes for specific technological challenges

Activities Space activities through NESDIS (National Environmental Satellite, Data, and Information Service). Develops and operates fleet of meteorological and climate satellites in geostationary and polar orbit.

NOAA USA

$1.04 billion Programs SBIR – Research grants awarded under NOAA research

Activities

Remote sensing: Radarsat, Radarsat2, Radarsat Constellation radar sensing sats Robotics: Canadarm, Canadarm2, Dextre shuttle and station robotics Science: MOST stellar observatory, CASSIOPE Human spaceflight: Astronaut corps, participates on US Shuttle missions

CSA Canada

C$0.37 billion Programs No dedicated programs for small business. Has active microsatellite missions (NEOSSAT)

and opportunities for small science platforms.

Activities

Science: Planetary exploration (Mars Express, Venus Express, Huygens), Earth observation (MetOp, Meteosat, Envisat), Observatories (XMM-Newton, INTEGRAL) Navigation: Galileo global navigation space system Technology development: Artes, Proba, test missions (LISA Pathfinder, GIOVE) Launchers: Ariane and Vega launchers Human spaceflight: Astronaut corps, ATV, Columbus ISS laboratory module

ESA Europe

€3.03 billion

Programs SME Initiative: programs to favor and support small and medium enterprises

LET-SME –- facilitates spinning-in new technologies for use by ESA TRP – Technology research awards for SMEs

Activities Operates European meteorological and climate satellites (Meteosat, MetOp, Jason-2)

EUMETSAT Europe

€0.17 billion Programs No dedicated programs for small business

Activities

Variety of activities, often in conjunction with ESA or with national R&D priorities Launchers: Ariane and Vega, sounding rockets Earth Science: SPOT, Pleiades, COSMA-SkyMed, TerraSAR-X Observatories: COROT, Swift, Agile Human spaceflight: Multipurpose Logistics Module and Harmony for ISS Research and Development: Aerospace R&D is primary activity of DLR and INTA

‘

European Agencies

CNES - France €1.05 billion

DLR - Germany €0.92 billion

ASI - Italy €0.28 billion

INTA - Spain €0.10 billion

Programs NAVOBS PLUS - aims to improve the participation of SMEs in Research and Technology Development (RTD) activities in space service infrastructure CNES is a signatory to the SME Pact DLR has an SME Working Group and Commissioner


Of all the civil space agencies, NASA is by far the most active, both in terms of the extent of activities and size of its budget NASA also leads in extending opportunities to small firms. In a typical year, NASA allocates between 17% and 20% of its procurements by value to small business, with the number rising over the last ten years. In 2007, over $2 billion in procurements were allocated to small businesses. Of that, $96.5 million were R&D-oriented grants, including $83.9 million under the Small Business Innovation Research (SBIR) program and another $12.6 million for the Small Business Technology Transfer program.

Trends and Issues Moon and Mars exploration – Both NASA (with its Vision for Space

Exploration) and ESA (with its Aurora program) have expressed serious interests and activities towards re-developing the capabilities to return humans to the Moon and then later to Mars. Already budgets for these activities have ramped up and are planned to ramp up further with the decommissioning of the Space Shuttle. This new orientation has increased interest in innovative life-support systems for long-duration spaceflight (such as next-generation space suits and resource-recycling) as well as new avionics for the human space vehicles.

Space Station operations – Operation of the International Space Station is planned until 2016 and likely to continue for years thereafter. Although responsibility, support operations and utilization after that point are currently unresolved, smaller firms, such as SpaceX, intend to support ISS operations through new cargo and crew vehicles, while some, such as SPACEHAB, have proposed commercial uses of Station laboratories for biological research and materials manufacturing.

Planetary sciences and observatories – Long-term strategic plans of both ESA and NASA have reaffirmed commitments to robotic planetary exploration as well as the development of new astronomical observatories. As the technological challenges and uniqueness of these missions are high, smaller specialized firms have often provided the unique solutions needed to accomplish mission tasks.

Small Business Participation in NASA Procurements

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1485.51609.9

16801600.1

1755.5 1818.91938.1

2002.7

0

500

1000

1500

2000

2500

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

NASA

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ess

Proc

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ents

(M

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0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

% o

f tot

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SB Procurements % of total procurement 2007 numbers includes $505.4 million awarded to small disadvantaged firms

under Section 8(a) of the Small Business Act. Also includes $96.5 million through SBIR and Small Business Technology Programs. Source: NASA


Examples include drilling technology needed for planetary surface science or highly precise control and sensing solutions for next generation observatories.

Earth sciences – Recent increased interest in climate studies has driven funding for oceanographic and atmospheric observation satellites, through both the meteorological agencies (NOAA and EUMETSAT) and the civil agencies. As with planetary missions and observatories, the need for innovative sensing equipment has often driven innovation from smaller, specialized research groups and ventures. Smaller groups of entrepreneur-scientists have been exploring the use of small satellites for highly innovative missions, such as GeoOptics which plans to use radio occultation of GPS signals for weather monitoring and climate research. Others are planning systems to measure and report solar wind events and patterns.

Prizes and technology partnerships – Successful prize competitions, notably Google’s $30 million XPrize to place a privately-sent lander to the surface of the moon, have encouraged government agencies to provide small sums for certain competitions. NASA has established the Centennial Challenges, which has included prizes for improved spacesuit gloves and for successful demonstration of lunar lander technology.

Budgetary and policy pressures – Despite enthusiasm for new space initiatives, budgetary support has been anemic. This situation (which exists at all agencies) has been compounded by cost overruns by a few large programs, exacerbating the fiscal viability of smaller missions. Although cost-control measures may ameliorate the situation for some projects, it is believed that either a major budget increase or a rethink of current exploration strategies will be required to allow the current ambitious plans to be implemented. U.S., European and Canadian commitments to space appear to have broad political support, but difficult global economic conditions may lead to pressure on these space budgets in the coming years.

Market opportunities The highly specialized nature of many of the missions tasked by civil agencies has often meant that certain critical capabilities are only found in a small company. Through NASA’s Innovative Partnerships Program and ESA’s SME programs, civil agencies provide a continuing market for technology research and development and thus incubate many promising new technologies inside small companies. Programs such as SBIR, STTR and LET-SME can provide an important source of revenues for very early stage aerospace companies and provide them with a useful and valuable technology portfolio for the later stages of their development.

In the US, small companies can take advantage of contract set-asides, 8(a) preferential bidding status and also position their services and products on the General Services Administration’s (GSA) schedules to drive government revenues. In Europe, geography can be an advantage, as ESA practices work-share spreading (juste retour), a practice which causes work to be spread to companies across the various member countries of ESA in proportion to their countries’ contributions.

Government support and interest for planetary exploration, earth science, advanced observatories and next-generation avionics and astronautics will help drive growth and valuations at those few firms that have the specialized skills, experience and track-record in building these systems.


Defense and Intelligence The defense and intelligence space systems market consists of design and fabrication of high performance vehicles and systems appropriate for military, intelligence and homeland security applications. By far the largest market for these space systems is the US government, comprising about 95% of all defense space spending in the world – about $25.9 billion in 2008. Within the US, spending is divided between a variety agencies that comprise the US military and intelligence communities, including the Air Force, the Navy, the Missile Defense Agency (MDA), the National Reconnaissance Office (NRO) and the National Geospatial Intelligence Agency (NGA). Military space projects for these entities may include:

Satellite Telecom: including secure two-way fixed, mobile and portable communications for operations in the field, battlefield management and normal base operations as well as the one way transmission or broadcast of data, imagery and video.

Satellite Surveillance & Reconnaissance: imaging satellites (visual spectrum, infrared, radar, multispectral), for early warning and detection, signal detection, meteorology, space surveillance and intelligence applications.

Navigation: systems such as GPS Navstar. Counter-space: anti-satellite systems, satellite protection systems and space

situational awareness, signal jamming and signal interference and monitoring. Near space: UAVs and high altitude lighter than air craft. Rockets and Missiles: missile defense systems, launch systems for

operationally responsive space.

US defense and intelligence spending on space has more than doubled over the last decade. Major programs in the last ten years have included Wideband Global SATCOM (WGS), the SBIRS early warning constellation, upgrades to the GPS navigation constellation and continued spending on missile defense. US DoD space spending since 2000 is shown below.

As with civil agencies, the US and European government defense agencies and services provides a variety of official outlets for small companies. In the following table, we present the major programs:

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15.74

19.388 19.115 19.69

22.114 22.418

25.949

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5

10

15

20

25

30

2000 2001 2002 2003 2004 2005 2006 2007 2008

Bill

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US DoD space spending (2000-2008). 2007 and 2008 are

forecasts. Source: Aeronautics and Space Report of the President 2006


Agency Country Budget Major space activities and programs for small business

Activities

Navigation: Global positioning system (GPS) Telecommunications

Advanced EHF – secure satcom Mobile User Objective System – Global mobile satellite comm. system Transformational SATCOM – next-gen global satcom system WGS – wideband satcom

Surveillance and sensing

Space Based Infrared System – missile early warning system Space Based Space Surveillance – monitoring of space environment Third Gen Infrared Surveillance – next-gen missile early-warning system NPOESS: polar-orbiting meteorological satellite system

Launcher systems

EELV: expendable launch vehicle systems (Delta IV, Atlas V) Minuteman III Squadrons: ICBM systems

Missile Defense Agency (MDA) – program to build anti-missile defense shield Operationally Responsive Space – program to develop responsive space capabilities. Includes responsive launch (Falcon) and satellite (TacSat) capabilities Counterspace Systems: includes anti-satellite R&D activities DARPA space activities: Research, development for advanced space technology

DoD USA

$25.9 billion

plus

MDA

$8.7 billion

Programs

Small Business Set-Asides – procurements reserved for bidding by small businesses. Section 8(a) Business Development Program – awards under the Small Business Administration programs to benefit smaller businesses CRADA – Cooperative Research and Development Agreement. Facilitates transfer of technology and technology partnerships SBIR/STTR – grants made for smaller research and development projects Women-owned, Veteran-owned, HubZone – procurements available to ensure equal opportunity for businesses owned by women, veterans or in underdeveloped regions. Operationally Responsive Space is considered a major opportunity for small satellite and innovative component developers. ORS emphasizes smaller, lower-cost but more rapidly deployable space systems.

Activities Operates and develops intelligence satellites for reconnaissance and surveillance (Zirconic, Keyhole, Lacrosse and Onyx). Most activity is classified.

NRO USA

$10 billion Programs Support for small business possessing Top Secret security clearances.

Activities Dedicated to providing geospatial intelligence solutions for US national defense, homeland security and safety of navigation

NGA USA

$3 billion Programs

NGA Mentor-Protégé Program – pairing program to allow smaller companies to gain knowhow and experience from participating larger companies SBIR – grants made for smaller research and development projects CRADA – Cooperative Research and Development Agreement. Facilitates transfer of technology and technology partnerships with the NGA. Explicitly supports commercial remote sensing through its NextView program.

Activities

European Defense Agency coordinates unified European military activities. Includes the European Union Satellite Centre, which provides analysis of imagery France, Germany, Italy and the UK operate military satcom systems. France leads in imagery and is developing intelligence, space surveillance and early warning systems. Multinational Space-Based Imaging System (MUSIS): agreement between France, Belgium, Germany, Italy, Spain & Greece to integrate data from national military imagery systems Skynet (UK), Syracuse (France), and Sicral (Italy) telecom satellites are being integrated to provide a satcom service for NATO.

Europe

€500 million - €1 billion

includes

France

€380 million Programs

AeroSME – Joint activity of the AeroSpace and Defence Industries Association of Europe and the European Commission to facilitate co-operation among SMEs, between SMEs and large companies, and with other aeronautics related bodies.


Although it is difficult to break out the DoD’s space budget by procurements to small business, just over 20% of DoD procurements department-wide went to small business, or $55 billion out of $269 billion in 2007. In addition, all three armed service branches, the Missile Defense Agency, DARPA and the NGA all participate in the SBIR/STTR programs. In 2007, the DoD awarded just over $1.3 billion for SBIR and STTR, with $367 million by the Air Force, $142 million by MDA, $78.6 million by DARPA and a small participation by the NGA.

Trends and Issues Operationally Responsive Space – Operationally Responsive Space or ORS is

the Air Force’s program to develop the capability to rapidly build, integrate and deploy space assets whenever needed (such as following the destruction of space assets due to anti-satellite attacks). Integral to this program is the ability to quickly draw on low-cost but adaptable and robust satellites and launch vehicles. Already, many small firms have participated in this program, notably the launch services company SpaceX with its Falcon rocket, and MicroSat Systems, who developed the TacSat 2 small spacecraft test bed for ORS. Although ORS has been viewed by many small firms as a major market opportunity for small satellites and innovative space components and materials, funding and top-level commitment to ORS has been erratic. Funding for ORS for 2009 is at $110 million with declining allocations for subsequent years. The US GAO has noted that true implementation of ORS is contingent on departmental support and improving access to space via new launch systems.

Iraq/Afghanistan – The conflicts in Iraq and Afghanistan have driven a vast amount of defense spending since 2001, either through direct supplemental budgets or through the US defense budget proper. Although direct space-related expenditures have been minor, indirect development has been driven by needs on the ground, specifically the demand for satellite bandwidth and connectivity for

network-centric warfare applications. Also significant has been the rapid pace of development of unmanned aerial vehicles (UAVs) and for autonomous robotics to counter improvised explosive devices (IED). Smaller aerospace firms with expertise in developing custom robotic solutions for planetary missions have found that additional applications and markets have emerged developing military robotics (or vice versa).

Telecom transformation and growing data demands – Since the early 2000s, a key focus of the transformation of the US armed forces has been the

The TacSat 2 ORS satellite, built by MicroSat Systems. Source: US Air Force

Honeybee Robotics has used their space systems experience to build robotics for

resource exploration and explosive handling. Above is a Honeybee end-effectuator built for

an iRobot system. Source: Honeybee Robotics


development of network-centric warfare capabilities. Although concepts have shifted in reaction to experience from this decade’s conflicts, Air Force plans continue to anticipate immense growth (forecasted 16 gigabits per second by 2012) in bandwidth demands as a result of UAVs and mobile satellite communications. Although the T-Sat (Transformational SATCOM) program intends to alleviate these issues by putting significant new satellite communications capacity under government ownership and control, schedule delays and a scale down in scope may guarantee continued opportunities for commercial satcom solutions. There is also a large focus on communications on the move (COTM), with the ultimate goal being the availability of 2-way, secure mobile broadband solutions to each war fighter.

Growing interest by Europe – European interest in military space capabilities has increased of late, with discussion about cooperation between the larger nations as well as the international organizations. A report in late 2008 suggests interest for cooperation between the European Union, the European Defense Agency and ESA in developing coordinated systems and placing military capability into ESA. Certain European countries have also expressed interest in developing their nation’s individual military space capabilities. For example, French President Nicholas Sarkozy in mid-2008 suggested that France intends to double space military spending. The relevance of this interest for small companies will be enhanced by a similar commitment to SME programs and capabilities.

Market opportunities Small companies with highly-educated workforces possessing specialized skills and high level government security clearances are well positioned to compete for government defense and intelligence contracts, either as a prime or as a subcontractor. Specialized capabilities and well-developed relationships with government officials create barriers to entry for others and enhances the value of the small company. In the US, as with civil space activities, small companies can take advantage of various programs to drive government revenues. In Europe, growing interest in SMEs and the integration of SME-oriented organizations and agreements into greater strategic plans will also help them access increased government spending. Government support and interest for ORS, autonomous robotics, advanced avionics and astronautics will help drive growth and valuations at those few firms that have the specialized skills, experience and track-record in building these systems.


Commercial Space The commercial space market consists of many activities, and its most broadly inclusive definition gathers all those aerospace activities that are focused on generating revenues (rather than, say, scientific data). However, for the purposes of this whitepaper we will focus only on the space systems manufacturing sector. Satellite manufacturing revenues from commercial customers were $3 billion in 2006 and $3.8 billion in 2007. The proportion of manufacturing revenues from commercial customers was at 25% of total manufacturing revenues in 2006 and 33% in 2007. The vast majority of activity concerns telecommunications satellites, with some emerging activities in remote sensing services. The chart below outlines the major customers in each major segment of the market. Also included is the number of individual satellites in each segment launched from 2006 to 2008.

For the most part, the satellites built for commercial customers are large, a natural result of the importance of telecom satellites as well as the increasing demands on power and bandwidth on these satellites. As a result, the integration of these satellites is almost exclusively the domain of large companies, with smaller companies relegated to providing components and some subsystems. There exists, however, a nascent opportunity for producers of small satellites. For instance, both the ORBCOMM telecom system and the RapidEye remote sensing system utilize small satellites built by smaller aerospace companies such as SSTL, OHB Technologies and MicroSat Systems.

Trends and Issues Satellites getting larger – Accelerating

bandwidth demands and the cost savings and consumer advantages of shrinking ground receiver sizes have driven

Industry segments

Satellites launched

2006, ‘07, ‘08 Customers

Fixed Satellite Services 53 (17,16,20)

SES, Intelsat, Eutelsat, Telesat, Spacecom, Hispasat, KT, Nilesat, ProtoStar, Satmex, Arabsat, JSAT, Optus, Yahsat, Ciel, AsiaSat, RSCC, APT, JSC Gazprom, Hellas-Sat, Measat, Turk Telekom, Hispamar, EuraisiaSat, Asia Broadcast, RascomStar, Nahuelsat, Horizons, Star One

GEO 3 (0,0,3) Inmarsat, Thuraya, Terrestar, SkyTerra, ICO Global Communications Mobile Satellite Services LEO 14 (0,8,6) Iridium, Globalstar, ORBCOMM

Direct Broadcast Television 6 (2,2,2) DirecTV, EchoStar, Telesat, B-SAT, KT, Telenor

Satellite Radio 2 (1,1,0) Sirius XM

Broadband 2 (1,1,0) Hughes, WildBlue, ViaSat, Avanti Screenmedia, O3b

Remote Sensing 10 (1,3,6) GeoEye, DigitalGlobe, RapidEye, ImageSat International, SPOT Image, infoterra, MDA Geospatial

A 3 meter high gain carbon composite antenna manufactured by Applied Aerospace Structures Corp of Stockton, CA, Source: AASC


commercial telecom satellites to be larger, with more and greater efficiency solar panels and larger reflector dishes. Some of the largest planned telecom satellites, such as TerreStar-1 and ViaSat-1 are approaching seven metric tons of girth and sport 10-20 meter diameter reflectors (produced by Harris Corporation). Many companies have been active in exploring the use of new materials to expand and enhance the ability to deploy larger structures or fit numerous smaller reflectors (2-6 meter) on a satellite. Examples of such materials include carbon composites (such as those being developed by Composite Technology Development), mesh materials and even inflatables as contemplated by L’Garde. While the general trend of the last decade for the geosynchronous telecommunication satellites has been increasing size, much of the gains achievable by increased size have now been realized and the industry is facing constraints on launch volume and weight that will require a new class of launch vehicles before new gains in size can be achieved. Therefore, much of the focus going forward will be in increasing solar power generation for a fixed weight and volume or increasing available bandwidth through enhanced utilization of spot beam technologies for frequency reuse given a fixed budget of power, weight and volume.

Satellites getting smaller – The development of new microelectronics, propulsion and power systems technologies has also allowed some communication and imaging applications to be served with much smaller satellites, in the range of 50 – 500 kilograms. This has been particularly true for low earth orbit (LEO) satellite deployments such as Iridium, Globalstar, and ORBCOMM. As the demand for ubiquitous mobile communications, machine to machine communications (M2M) and earth imaging expands, we would expect increasing demand for these LEO smallsat constellations. Smaller satellites are being manifested in other ways, namely the increasing presence of ‘small GEO’ satellites, smaller buses that shrink geostationary satellites to between 1000-2000 kg. Orbital Science Corporation’s STAR bus has already shown success in providing lower cost alternatives to traditional telecom satellites. In Europe, OHB Technologies is also developing a small GEO bus for telecom satellites.

Commercial Orbital Launch Forecast (1993-2016), Source: FAA-AST


Satellites getting tiny – The smallsat achievements of the past decade are not the end of this evolution toward smallness. In fact, satellites have been built and launched that are as small as 1 kilogram. These satellites are sometimes referred to as microsats or even nanosats (the really small ones). These tiny satellites are finding greater use in scientific, military and even commercial uses. Not only is this driving adoption of newer technologies, it is spurring development of companies devoted exclusively to the manufacturing of small satellites. Today, a relatively small organization with relatively modest capital investment can design, manufacture, integrate and test complete satellite systems. We discuss these trends further in the ‘Small Satellites’ section of this paper.

Telemetric and geospatial services – Maturation and expansion of commercial remote sensing and geo-location based services has led to an increase in demand for satellites to provide higher resolutions, imagery in more spectral bands and more frequent revisit times at the right cost. As remote sensing satellites are often used in low-earth orbits, this increased demand drives greater application of smaller launch vehicles. The remote sensing market also has potential for micro/nano satellite applications via synthetic aperture technology and formation flying as well as sensing constellations (building on the work of the Disaster Monitoring Constellation and the RapidEye constellation). Sensing services are also finding opportunities as hosted payloads on larger missions.

ITARs (International Traffic in Arms Regulations) – In the satellite industry, it is almost universally agreed that the US export control regime, ITARs, has been cumbersome and detrimental to cross-border satellite manufacturing cooperation. Continued implementation of ITARs in its existing form is likely to especially hinder the growth of smaller companies, as they will have a disadvantage in satisfying the regulatory requirements from an administrative and cost point of view. Changes in the ITARs regime will largely depend on the degree of US Congressional appetite and attention, assuming there is Presidential support from the new Administration.

New launch services – New entrants to the launch services market are promising to lower the cost of launch while older services are offering new ways for smaller payloads to enter orbit. Of newer entrants, SpaceX is offering the lower cost Falcon 1 and 9 rockets while AirLaunch is offering the ability to launch small payloads with low lead-time. Older launch services, on the other hand, are becoming more accommodating of smaller payloads, notably the United Launch Alliance’s development of the ESPA-ring, a standardized payload interface to allow smaller payloads to travel alongside a larger satellite.

Market opportunities Satellite operators have a tendency to view the satellite system itself to be cost centers and thus look for technological enhancements and features that reduces overall costs or enhances revenue-generating opportunities. Technology expenditures and investments are further spread across manufacturers, subsystem developers and component developers to provide such offering to operators. For telecom satellite systems, opportunities would include systems which enhance the potential for more and more-capable transponders and spot beams (enabled by new materials or greater availability of power), longer life spans (enabled by greater reliability or greater fuel efficiency) or lower launch cost (from lower mass) as well as other cost operational improvements. In other areas, such as remote sensing, opportunities exist for small companies developing precision sensors, controls systems and rugged microelectronics


The Space Activities Value Chain Global satellite manufacturing revenues over the period of 2002-2007 have held relatively steady, amounting to between $10 - $12 billion US dollars annually. In 2007, this amounted to approximately $11.6 billion, with sales being booked on the delivery and launch of each satellite. US satellite manufacturing activities accounted for just over 40% of the total revenues over this period. Most of these revenues, however, flow through the prime contractors to the companies throughout the value chain. A usual subdivision of the value chain in aerospace and space activities places most of the manufacturing into three tiers, each encompassing companies and activities that involve different degrees of system complexity. At the top of the value chain are integrators, the largest of the firms who design, integrate, market and sell whole space systems for the end user. Although many integrators have some sub-systems design capability, for the most part, they now outsource much of their component and sub-systems needs to the next levels, on the second or third tier. With the exception of a few companies which specialize in the niche field of small satellites, this tier is dominated by very large companies. The next tier consists of companies that provide subsystems, such as power modules, structures or communications systems. These firms tend to be large and in some cases comparable in size to the Tier 1 integrators, but frequently involve a greater diversity of activity and innovation. Some of the major space systems integrators and subsystems manufacturers in the US, Canada and Europe are listed in the table below.

Major Tier-I Integrators Major Tier-II Subsystem Developers (Many Tier-I s active in this area)

US Boeing, Lockheed Martin, Northrop Grumman, Space Systems Loral, Orbital Sciences Corporation, Ball Aerospace

Raytheon, Alliant Techsystems, L-3 Communications, UTC, General Dynamics, Honeywell, ITT, Harris, Aerojet, Goodrich, Moog

Canada MacDonald Dettwiler and Associates COM DEV

Europe EADS Astrium, Thales Alenia, OHB Technologies, Carlo Gavazzi Space

BAE Systems, QinetiQ, RUAG Aerospace, Oerlikon, SAFRAN, Avio, Kongsberg Gruppen

If the first and second tier is dominated by large companies, it is in the third tier, component developers, where smaller companies flourish. Companies which operate on this level, work on individual components, such as motors, antennas, actuators and solar panels. As the number of components on typical space systems is large, this tier represents a vast segment of economic activity, with many participating companies, a few very large but also many very small. The market opportunity for second and third tier suppliers is clearly some fraction of the total manufacturing market. However, since integrators have had a tendency to

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outsource much of their subsystem development, it most likely represents a majority of the total economic input for the industry. Satellite integrator Space Systems/Loral reports approximately 10% gross margins on manufacturing revenues (9.5% on $761.4 million for 2007). If the majority of that cost is directed to outsourced subsystems and components, then at current activity levels, the market available to second and third tiers would represent a market opportunity of several billion U.S. dollars per year worldwide. In addition to the three manufacturing tiers, there are many companies that provide engineering or operational services or related software to support the many activities that take place among aerospace companies and their customers. These mission support and service companies, provide critical support, such as tracking, telemetry and control (TT&C), engineering support, orbital and mission analysis, data analysis, and much more.

Major Mission Support and Service Companies

US Computer Sciences Corporation, Science Applications International Corp, Booz Allen Hamilton, United Space Alliance, Jacobs Technology Inc, ASRC Aerospace, Stinger Ghaffarian Technologies, Wyle Laboratories

Canada SED Systems (Calian)

Europe Grupo SENER, Clemessy SA, VEGA Group (Finameccanica), GMV

Contracting The primary vehicle for revenues for aerospace companies is work that is contract based, awarded or negotiated in concert with the primary customers (i.e. government agencies or commercial operators) or with the large Tier-I and Tier-IIs as a subcontract to a larger project. Although there are many different contracting methods and procedures, from a compensation point of view, there are two major methods:

Cost-plus contracting: Determines compensation as a function of cost as well as a predetermined profit. Cost is determined either in terms of time and materials or from some agreed upon estimate (or a combination of the two), while the ‘plus’ component can be a flat rate, or awarded in relation to performance metrics. Cost-plus contracts are often awarded for technically challenging projects where the uncertainty in the resources needed to complete the task is too great to take on in a fixed price contract. This allows many small companies to take on very challenging projects. This method is used extensively in many government contracts.

Firm fixed price: Compensation is based on a flat price paid on deliverables. This method is preferred by commercial customers as it protects them from cost overruns. Government contracting uses this method when feasible.

Government contracting practice also includes a number of processes to streamline the acquisition of certain goods or, in some cases intangibles, such as research. Certain contracts are made as Indefinite Delivery/Indefinite Quantity (IDIQ) for open-ended commitments for products or services. Other contracts are pre-negotiated, such as the Schedules maintained by the US General Services Administration (GSA). GSA Schedules allow small companies to offer services or products to government buyers on an equal level as larger companies and without the additional overhead of negotiating another contract for every purchase.

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Lifecycle patterns of small aerospace companies: Growth & Exit Birth and Rapid Growth: The birth of an aerospace company is often the product of one or more experienced engineers or wealthy space enthusiasts with an idea, some passion and more than a little guts and gumption. They forge or spin out a company backed by personal capital, the money of friends and family, angel investors or, in a few cases, venture funds. As the company develops and offers its new technology or service to the market, it is often supported by small government R&D grants and, if all continues well, the first small subcontracts from larger aerospace firms, defense department research laboratories or civil space agencies. At this early stage, many companies are able to grow quickly as their best of breed technology or superior service offering penetrates a market sector and displaces older and less competitive alternatives. This growth is often aided by small business awards, such as SBIR or SME contracts, as well as cost-plus contracts that allow them to not be distracted with the task of raising additional capital. Financing Challenges to Internal Growth: Once an aerospace company reaches a certain size, however, growth becomes more difficult. New market share gains become more challenging and entering new market sectors requires substantial R&D funding and the additions of new capabilities and customer relationships. Small grants may no longer be enough to sustain significant workforces on their own or fund major new initiatives. Raising financing to support this growth may also become more difficult as seed sources become tapped out and venture capital and private equity firms prove difficult to attract. Historically, these financial investors have been less interested in businesses heavily involved in government contracting. Such aerospace businesses are often lower growth and lower margin opportunities with either fickle or very lumpy program based sources of revenue compared to typical venture capital and private equity backed sectors. For venture capitalist, alternatives such as biotech, software, Internet applications or more recently, alternative energy and green technology, appear to provide higher potential upsides for their investments (although with higher risk too). For private equity firms, the dependence of these aerospace companies on large government contracts that can end abruptly or lose their funding has been a challenge when seeking to lever their investment with debt financing. Private equity firms have also tended to pursue larger transactions where they can put significant capital to work (e.g. $50 - $500 million). In addition, in many cases, small company cost structures and typically modest profit margins have also prevented the buildup of significant surplus cash to expand the company’s capabilities. Small aerospace companies are therefore often faced with a serious financing challenge if they want to grow internally to the next level. While we see many reasons investor interest may pick-up in the near term, (e.g. relative growth of aerospace versus other sectors in this economy, high credit quality customers, leading edge innovation), we do believe it may take years for significant financial investor interest to build in the sector as they gain comfort through increased expertise and successful portfolio investments. Company founders and senior management, moreover, frequently encounter difficulties in expanding their business outside of core competencies and interests, especially given the risks inherent in such expansion and the sometimes necessity to give up or share control of the firm. In other cases, a management team has deftly navigated the small business 8(a) set asides to create an attractive and vibrant business only to finally run


up against the small business qualification limits or expiry of their status. At this point, further growth is at the expense of their protected bidding status and more likely to be in direct competition with previous customers for whom they have served as subcontractors. Making this leap out of 8(a) status has proven challenging for many companies. Generally, companies facing this threshold need to either quickly acquire the comparable scale of their competitors or sell to one of them. Decision to Grow Inorganically or Exit: At some point founders and their shareholders will seek to either (a) exit the company or at least build a path to nearer term liquidity or (b) seek a business combination or series of acquisitions to grow inorganically. This can be triggered by retirement and estate planning needs, an unsolicited bid from an industry player or a realization that the company can not independently grow itself to the next level (as in the 8(a) case above). From an employee perspective, growth creates new opportunities for self fulfillment and being merged or acquired is often preferable to stagnation. From an investor’s perspective, consolidation is viewed as an important way to diversify a company’s revenue and customer base, expand management depth, broaden core competencies and move up in the contracting levels and thus win larger contracts with fatter margins. There are also frequently cost savings to be gained and revenue or technology synergies. All of these factors lead to less risk, more growth and higher valuation multiples. The consolidation also either creates liquidity or increases its future prospects. For these reasons, we believe this fragmented sector is ripe for mutually beneficial business combinations that should be of interest to existing shareholders as well as outside investors.

Patterns of consolidation All things considered, when small aerospace companies reach a certain size, it is often inevitable that they become acquisition targets. How then, does this get reflected along the value chain? One major trend has been the vertical consolidation between second and third tier manufacturers. Large subsystem developers have been acquiring smaller firms that specialize in a particular area of technology or component. In doing so, they add the technology to their own portfolio as well as the team that brought the innovation to fruition. This is also driven by cultural issues – larger firms often are structured in a fashion that does not reward innovation by employees – meaning that much of this innovation occurs in the more entrepreneurial settings at smaller firms. Smaller component manufacturers are thus seen as breeding grounds for new technologies that will eventually make their way into the capabilities of the large second tier firms. Often the ability of a second tier company to win a contract over its competitors depends on its exclusive access to a third tier technology that provides the competitive edge. An acquisition of this technology can thus translate into much larger dollar volumes of business than the cost of the acquisition.

On the other hand, smaller component developers need not always find themselves as a division of a Tier-II firm. In a limited industry, sometimes with only a few buyers, it can make sense for companies with similar capabilities and technologies to band together, building scale and cross-exchanging ideas through horizontal consolidation. For

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vendors providing different products, each with a limited market, it can make sense to aggregate demand for more economic production runs. Moreover, horizontal consolidation amongst component or subsystem developers can make more sense than being acquired by an integrator, as their market then becomes limited to that one integrator. Geography can also be an advantage, for instance an acquisition that builds a U.S. presence and greater access to U.S. customers for a non-US company (and vice versa).

Of those companies providing mission services and support, acquisition activity

has occurred primarily from either larger engineering consulting firms (such as CSC, SAIC, Jacobs Engineering, the United Space Alliance or SRA), or by the large Tier-2 developers (such as Raytheon or L-3). In the former case, the acquisition adds another capability to a larger ‘suite’ of services. In the latter, it is often that the service adds a capability or set of software tools that has synergy with an aerospace system.

Finally, we note that the acquisition of companies building and integrating small satellites (i.e. the few small Tier-I s) has proven to be quite popular, with many of the mainstays of the industry (MicroSat, AeroAstro, Spectrum Astro) having been bought by larger firms over the course of the ‘00s. At the time of this writing, acquisitions for both SSTL and SpaceDev had recently been completed. This consolidation among the Tier-I integrators and the few of their number who happen to be small in part reflects a growing interest by the major aerospace companies to get a piece of the small satellite pie. EADS Astrium in fact recently acquired SSTL for this reason.

It ought to be noted with interest that, as opposed to the case of component developers, where acquisition interest rests often in the technology, small satellite builders represent a different motivation for potential acquirers. Small satellite companies, for all their innovation, are often not developing new technologies, but rather figuring out how to integrate existing (often off-the-shelf) technologies into small, rugged packages. The attraction of small satellite companies appears to be at least in part related to the entrepreneurial spirit that these companies possess, a characteristic not as often seen in their larger cousins.

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Notable aerospace companies: Capability tables The following four tables summarize info and capabilities of notable small companies active in space activities in North America and Europe. In doing so, we mean to illustrate the diversity of capabilities and geographies available - as well as to highlight a selection of small companies active in this industry. This list is not exhaustive - there are many more small companies doing great work involving space, certainly more than we can adequately cover in one whitepaper. Every company presented here is also profiled in greater detail later on in the ‘Notable small aerospace companies’ section of this whitepaper.

Capability table: Mission services and support companies

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a. i. solutions Lanham, MD x x x Analytical Graphics Inc. Exton, PA x x

Braxton Technologies LLC Colorado Springs, CO x x Command and Control Technologies Corp Titusville, FL x x x Emergent Space Technologies, Inc Greenbelt, MD x x x x x x Glowlink Communications Technology Inc Los Altos, CA x x x

Integral Systems, Inc. Lanham, MD x x x x x x Integrity Applications Incorporated Chantilly, VA x

Interferometrics, Inc. Herndon, VA x x x x KinetX, Inc. Tempe, AZ x x x x x

Orbit Logic Inc. Greenbelt, MD x Quantum Technology Sciences, Inc. Cocoa Beach, FL x

Quartus Engineering Incorporated San Diego, CA x Satellite Services B.V. Katwijk aan Zee, The Netherlands x x x

SciSys PLC Chippenham, UK x x x x SPACEHAB, Inc. Houston, TX x x

STAR Technologies Corporation Great Falls, VA x x the Hammers Company, Inc. Greenbelt, MD x x x

Universal Space Network, Inc. Newport Beach, CA x x x

Capability table: Smallsat companies

Smallsat buses Smallsat services and components

SpaceBel Angleur, Belgium x

SpaceDev, Inc. Poway, CA x x

SpaceQuest, Ltd. Fairfax, VA x

Surrey Satellite Technologies Limited Guildford, UK x x


Capability table: Components and subsystem companies

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ABSL Power Solutions Limited Abingdon, UK x x Aitech Defense Systems, Inc. Chatsworth, CA x x

Andrews Space, Inc. Seattle, WA x x Applied Aerospace Structures Corp. Stockton, CA x x x AZ Technology Corporation Huntsville, AL x

Astrolab, Inc. Warren, NJ x x Bigelow Aerospace, LLC Las Vegas, NV x x x

Bradford Engineering B.V. TG Heerle, The Netherlands x x x x Broad Reach Engineering Boulder, CO x x Canyon Composites, Inc. Anaheim, CA x

DR Technologies, Inc. San Diego, CA x x Fibertek, Inc. Herndon, VA x

Honeybee Robotics New York, NY x L’Garde, Inc. Tustin, CA x

Malin Space Science Systems, Inc. San Diego, CA x Marotta Controls, Inc. Montville, NJ x x

Maxwell Technologies, Inc. San Diego, CA x x Media Lario Technologies S.r.l. Bosisio Parini, Italy x x

Michigan Aerospace Corporation Ann Arbor, MI x Neptec Design Group, Ltd. Ottawa, Canada x

Optech, Inc. Vaughan, Canada x Orbital Technologies Corporation Madison, WI x x

Paragon Space Development Corp. Tucson, AZ x x x Quallion LLC Sylmar, CA x

SEAKR Engineering, Inc Centennial, CO x x Space Micro, Inc. San Diego, CA x x x

Stellar Microelectronics, Inc. Valencia, CA x TiNi Aerospace, Inc. San Leandro, CA x

Toyon Research Corporation Goleta, CA x x Yardney Technical Products, Inc. Pawcatuck, CT x


Company size and capability descriptions Company Employees Description

a. i. solutions 170 Space mission and orbital analysis software ABSL Power Solutions Limited - Batteries for extreme environments and optical calibration Aitech Defense Systems, Inc. - Ruggedized, radiation-hardened interface boards and microprocessors

Analytical Graphics Inc. >250 Visualized orbit and navigation software toolkits and interfaces Andrews Space, Inc. >80 Control systems, gyro, small satellite buses. Hypersonic platforms

Applied Aerospace Structures Corp. 270 Composite satellite structures – reflectors, antenna towers, substrates Astrolab, Inc. - RF connectors and cabling

AZ Technology Corporation 35 Space-ready coatings and paints. Optical measuring devices Bigelow Aerospace, LLC - Inflatable orbital habitats

Bradford Engineering B.V. 50 Sensors, thrusters, and fluid systems. Microgravity experiment platforms Braxton Technologies LLC - Off-the-shelf telemetry, tracking and control software Broad Reach Engineering - Radiation-hardened microelectronics and sensor systems Canyon Composites, Inc. 45 Composite materials and components. Focus on structure components

Command and Control Technologies Corp - Space operations automation tools DR Technologies, Inc. 95 Composite materials and components.

Emergent Space Technologies, Inc. - Aerospace and information systems consulting Fibertek, Inc. >125 Optical systems and instruments

Glowlink Communications Technology Inc. - Signal monitoring hardware and software Honeybee Robotics 50 Planetary robotics and drilling systems. Motors, hinges, autonomous robotics

Integral Systems, Inc. 470 TT&C, signal processing, network management and signal monitoring systems Integrity Applications Incorporated >300 Geospatial analysis for intelligence, surveillance and reconnaissance

Interferometrics, Inc. - Signal monitoring tools and stations KinetX, Inc. >50 Space systems, software and hardware engineering

L’Garde, Inc. - Inflatable space structures Malin Space Science Systems, Inc. 30 Planetary imaging systems for missions to Mars, the Moon, Jupiter

Marotta Controls, Inc. - Fluid control systems, components and actuators for air and spacecraft Maxwell Technologies, Inc. 302 Radiation-hardened microelectronics and power systems

Media Lario Technologies S.r.l. - Semiconductor processing, optical instruments and x-ray telescope sensors Michigan Aerospace Corporation 30 Machine vision systems, optical sensing in aerospace applications

Neptec Design Group, Ltd. 80 Machine vision systems, Lidar, laser, 3D sensing Optech, Inc. >200 Lidar optical sensing systems

Orbit Logic, Inc. - Mission planning and scheduling software Orbital Technologies Corporation 80 Propulsion, space resources, and energy systems

Paragon Space Development Corp. 53 Environmental control, life support systems and thermal control for spacecraft Quallion LLC >85 Lithium Ion battery technology for aerospace applications

Quantum Technology Sciences, Inc. - Data analysis and processing for intelligence and security Quartus Engineering Incorporated >60 Aerospace engineering and design services

SciSys PLC - Business and technology solutions for space simulation and control systems Satellite Services B.V. - TT&C satellite ground equipment. Payload and instrument simulation and test

SEAKR Engineering, Inc. ~200 Microelectronics, communications and power equipment for spacecraft Space Micro, Inc. - Microelectronics, RF components and advanced materials

SpaceBel 88 Small satellite services and engineering. Geospatial services SpaceDev, Inc 185 Small satellites and satellite components and mechanisms

SPACEHAB, Inc. 66 Launch preparation and payload processing SpaceQuest, Ltd. - Small satellite components

STAR Technologies Corporation - Spacecraft guidance, navigation & control design, analysis and simulation Stellar Microelectronics, Inc. - Hardened microelectronics engineering

Surrey Satellite Technologies Limited 300 Small satellite buses and integrated systems the Hammers Company, Inc. - Software engineering for simulation and control

TiNi Aerospace, Inc. - Custom actuators and pin pullers for satellite systems Toyon Research Corporation 100 RF components and antennas, C4ISR systems Universal Space Network, Inc. - Worldwide network of ground stations for TT&C services

Yardney Technical Products, Inc. - Batteries for extreme environments, launchers and spacecraft ‘-‘ indicates instances where public info on recent staffing levels is unavailable

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Activities

Small satellites If large aerospace companies can build large satellites, can small aerospace firms build small satellites? Apparently, the answer is yes, as a cottage industry has grown over the last thirty years for the design and building of ever smaller satellites – less than 1000 kg, less than 100 kg, even less than 10 kg. Borne out of amateur efforts and academic programs, more and more of these projects have become substantial enterprises. Even more recently, larger aerospace firms have noticed this activity and sought the capability of building small satellites in their own houses, often through acquisition.

Of the many successful companies in this field are UK-based Surrey Satellite Technology Limited (SSTL), a venture which started as a university project, MicroSat Systems, which produced the second TacSat satellite for the U.S. Air Force and SpaceDev, a pioneer in small space missions. Among SpaceDev’s numerous achievements is the building of CHIPSat, a 64kg scientific spacecraft to study the interstellar medium. Many other ventures, some as small as just a few engineers, have been started by teams located around the world.

As the decreasing size and cost of advanced microelectronic, power and propulsion technology allow these ventures to form, the question will be not “Can you build it?”, but “What can they be used for?” To date, much of the heritage of small satellites has been in demonstrating new technologies. Although the continued activity of research centers and universities suggest that technology will be a mainstay of small satellites, potential markets have been identified for communication and remote sensing for both commercial and military uses (with particular eye to Operationally Responsive Space). A Futron study presented in August 2008 and shown below identified a potential market of 39-76 small satellites per year, with yearly revenues between $292 to $570 million (assuming $7.5 million per satellite).

Market Sats/year Revenues/yr ($M)Military Science and Technology 10-20 75-150Intelligence, Surveillance and Reconnaissance 1-10 7.5-75Remote Site Communications 10-15 75-112.5Polling of Unattended Sensors 10-15 75-112.5High-Resolution Earth Obervation 5-10 37.5-75Landsat-class Environmental Monitoring 3-6 33.5-45TOTAL 39-76 292.5-570

Source: Futron

The CHIPSat small satellite – built by SpaceDev, Inc. Source: SpaceDev


Although much of this demand, if it materializes, will come from civil and military space programs, there is interest in small satellite offerings for commercial services. On the left is a photo of the five satellites of the remote sensing constellation operated by German

geospatial firm RapidEye. The satellites, which were built by the aforementioned SSTL, weigh in at 150kg and provide hyper spectral imagery for seasonal land use monitoring and other dynamic events. Another commercial service based on small satellites is the ORBCOMM global machine-to-machine communications network. The building of the second generation of this network has been tasked to Sierra Nevada Corp, which acquired MicroSat in early 2008.

The Cubesat

How small can small go? Some have gone as far as placing an entire satellite in a 1 kg cube. Known as a ‘cubesat’, these 10 cm cube platforms, first conceptualized by professors at Stanford University, have become very popular among universities. They are known to be very cost effective, perhaps requiring as little as $100,000 to build and send to orbit. Although commercial activity with cubesats is nascent, a couple ventures have been formed to service this new industry. Among them is Pumpkin, a San Francisco-based company offering cubesat kits, Clyde Space, a Glasgow-based company offering small batteries and solar panels for use aboard these tiny satellites and SpaceQuest, which offers standardized off-the-shelf components for small satellites. Will cubesat companies be the next wave in aerospace? Perhaps it is too early to tell, but with Boeing and Aerospace Corporation building their own cubesats, maybe so.

Mission support services and products Mission support is the tail to the aerospace dog, the part of the industry that provides either engineering, software or services support to allow a mission to be designed appropriately and to operate successfully and smoothly. In the context of space systems, mission support activities often include:

Mission planning, towards the planning of mission tasks, the evaluation of feasible mission scenarios and the optimization of mission parameters.

Launch operations, to support testing and integration necessary to prepare a satellite

A satellite in the palm of your hand – The AAU CubeSat built by the students of

Aalborg University. Source: Aalborg University

SSTL – RapidEye SmallSat constellation Source: SSTL

Glowlink Communications Technology Inc. provides spectrum interference monitoring

solutions. Source: Glowlink


for launch (e.g. Astrotech subsidiary of SPACEHAB) Orbit telemetry, tracking and control, via the monitoring of missions as they

operate in space and the handling of data through receiving and processing systems (e.g. Universal Space Network).

Flight operations and software, to guide spacecraft and to control various operating functions, such as orientation, propulsion and diagnostics (e.g. Integral Systems).

Monitoring interference, to detect and avoid electromagnetic transmission interference with other missions (e.g. Glowlink Communications Technology).

The software requirements for space projects have tended to be enormous, often necessitating large expenses for customized software and systems. It needn’t always be this way. Indeed, rather than build custom solutions for every mission, a group of small

aerospace companies have built healthy businesses with commercial off-the-shelf software for mission support and control. Companies such as a.i. solutions (see screenshot of a.i.’s FreeFlyer program), Analytical Graphics and Braxton Technologies have simultaneously built solutions that have been used for dozens of military and civil space missions while also providing the tools to enable many more small space companies and academic projects to succeed.

As use of commercial software for mission support becomes more common, it allows missions to reduce the cost of their overhead and brings capabilities to groups that would not have the ability otherwise. Activities like these are truly an instance of small aerospace helping other small aerospace.

Components and subsystems It’s an often told story: a group of engineers and researchers develop a new technology that improves on a process or system unlike anything else available. Seeking an outlet for their ingenuity, they start a company to develop and sell their new technology to the world. Suddenly, they are entrepreneurs, with a ready solution, a little grit and a lot of audacity. Some will succeed and some will not. However these ventures eventually find themselves, there is little doubt that these entrepreneurs and their fledgling companies are the bedrock on which much technological progress stands. Thus, it should come as no surprise the wealth of activity by small companies in providing innovative component to the aerospace industries. Some of the many contributions include:

a.i. solutions’ FreeFlyer mission planning software Source: a.i. solutions

The radiation-hardened Single Board Computer for space, developed by Maxwell Technologies

Source: Maxwell Technologies


Microelectronics and nanotechnology – The harshness of the space environment and the rigors of high-performance aeronautics require rugged electronics. Companies such as Aitech Defense and Maxwell Technologies specialize in providing computer systems and electronics suited for the space environment. They include customized interface cards, amplifiers, memory systems and digital logic. There is also great activity in adapting nanotechnology and microelectromechanical systems (MEMS – micro-level mechanical devices) to aerospace applications.

Specialized sensors – Missions that demand high-performance instruments also require the expertise and technology to design and development innovative sensors. Companies like Michigan Aerospace and Neptec Design Group provide a variety of sensor technologies, building spectrometers, imagers, Lidar

systems and instruments for scientific and meteorological missions.

Compact and efficient energy components – High efficiency solar panels, long lived batteries, ultra-capacitors and fuel cell technology have been developed for long duration autonomous space missions. Companies active in this area include Yardney Technical Products, Quallion and ABSL Power Solutions.

Mechanisms – Including control motion gyros, hinges, motors, and drilling equipment. Honeybee Robotics, Andrews Space and many others have been active in developing motorized equipment to withstand harsh

environments while fitting within constrained mission parameters. Innovative structures and materials – A rich field with many new materials with

fantastic properties has come about as a result of research and development from small teams. Composite carbon materials have provided an especially rich breeding ground for smaller companies providing high performance materials, such as low mass deployables and reflector dishes. Small companies active in this area include Canyon Composites, DR Composites, Applied Aerospace Structures Corp and Composite Technology Development Corp.

A component of the Fast Imaging Plasma Spectrometer aboard MESSENGER probe to Mercury, developed by Michigan Aerospace

Some of the many components formed out of composite materials at Canyon Composites. Source: Canyon


Conclusion Although the foreseeable future portends that the heaviest lifting in the aerospace industry will be done by the largest companies, there is truly a rich field of smaller companies providing critical capabilities, components, subsystems and even whole systems and missions in both government and commercial markets. Moreover, by serving markets that the large companies do not, can not, or choose not to serve, small companies provide a home where innovation and entrepreneurship can succeed and thrive.

Aerospace is often a difficult industry to grow a company beyond a small size (e.g. 500 employees). Top talent is critical, R&D and capital expenditures are often high, lead times to market can be long, overhead for government contracting is considerable and revenues are often quite lumpy and subject to government policy change. Nevertheless, small aerospace companies often have significant advantages, such as a solid and growing market supported in large part by increasing government spending, a portfolio of unique technologies, an educated and flexible workforce (often with valuable security clearances), and key relationships with government officials. We believe these attributes make the small aerospace sector an attractive investment opportunity for the right strategic partners and financial investors.


Notable small aerospace companies Presented here is a selection of small aerospace companies engaged in space activities. Most of these companies has a size between 30 and 500 employees and are engaged in a substantial amount of activities involving space systems, services or support. This list is not exhaustive – there are many exceptional companies not listed in this section. This list should not be considered an endorsement of any particular company and no value judgment should be interpreted based on the presence or non-presence of any company on this list.

Companies involved in small satellites Company Description

SpaceBel, www.spacebel.be/en/, HQ: Angleur, Belgium

Founded in 1988, 88 employees, 2006 Revenues €6.3 million

Based in Belgium, SPACEBEL is a significant contributor to the activities of the European Space Agency through its expertise in micro satellite systems and instruments. It has expertise particularly in high-performance "tailor-made" IT solutions for satellite platforms and on-board instruments, ground infrastructure, test benches and systems as well as satellite communications networks. SPACEBEL’s experience with microsatellites is based on its work on PROBA, the European platform used for technology demonstration missions. In addition to its space activities SPACEBEL offers geo-information and Earth observation services following its acquisition of DA VINCI in 1998. SPACEBEL designs and markets decision support systems for environment and hazard management using Earth observation data.

SpaceDev, Inc., www.spacedev.com, HQ: Poway, CA

Founded in 1997, 185 employees, 2007 Revenues $34.7 million

Founded with the vision of building a commercial enterprise on the back of innovative small missions to deep space and earth orbit, SpaceDev today creates and sells affordable space products and solutions to government and commercial enterprises. SpaceDev products and solutions include the design, manufacture, marketing and operation of sophisticated micro and nano satellites, hybrid rocket-based orbital Maneuvering and orbital Transfer Vehicles (MoTVs) as well as safe sub-orbital and orbital hybrid rocket-based propulsion systems. Between itself and its Starsys division, SpaceDev has flown over 2,500 mechanisms and systems on 250 spacecraft, affirming their understanding of design/build of space qualified parts and providing the heritage desired by their customers. SpaceDev is a subsidiary of Sierra Nevada Corp.

SpaceQuest, Ltd., www.spacequest.com, HQ: Fairfax, VA

Founded in 1994

SpaceQuest, Ltd. is a developer of advanced satellite technology for government, university and commercial use, specializing in the design, development, testing and manufacture of spacecraft as well as space and ground components for operation with low-Earth orbiting satellites. SpaceQuest’s specialty is the production of components for small satellites, offering readily available parts for academic projects and miniaturized spacecraft. SpaceQuest offers parts for communications and antenna systems, power distribution electronics and batteries, control and telemetry boards plus solar cells and control software. SpaceQuest’s components have flown on many small amateur communications satellites and have recently been used extensively on Bigelow Aerospace’s orbiting Genesis modules.

Surrey Satellite Technologies Limited, www.sstl.co.uk, HQ : Guildford, UK

Founded in 1981, approx. 300 employees

Born out of a University of Surrey project to build a small satellite out of commercially available, low-cost components. SSTL pioneered ‘commercial off the shelf’ (COTS) satellite technology, taking standard consumer technology and adapted them to the unique environment of space. Today, it is a leader in small satellite engineering research. SSTL has built 32 spacecraft to date, with more under contract, and is delivering missions that provide services in telecommunications, remote sensing, know-how transfer and technology demonstration to customers across the globe. Two of SSTL’s most significant accomplishments include the establishment and construction of the Disaster Monitoring Constellation, a multi-national project to build a global monitoring system, and the RapidEye constellation, a commercial venture to provide multispectral sensing service. SSTL is a subsidiary of EADS Astrium.


Companies providing mission support services and products Company Description

a. i. solutions, www.ai-solutions.com, HQ: Lanham, MD

Founded in 1996, 170 employees, 2007 Revenue: $18 million

a.i. solutions has been a provider of aerospace engineering services, mission-critical IT services and commercial-off-the shelf (COTS) space mission analysis software, with a particular specialty in software for orbital analysis and mission design. From 8 locations located across the U.S., a.i solution’s engineering staff is capable of providing all aspects of expendable launch vehicle and spacecraft mission analysis, operations, systems engineering and related IT services. Moreover the company’s premier commercial product suite, the GUI-enabled FreeFlyer, has been used in dozens of NASA, NOAA and U.S. DoD space missions and used by engineers and mission planners across the space industry.

Analytical Graphics, Inc., www.stk.com , HQ: Exton, PA

Founded in 1989, >250 employees

Unlike their larger aerospace brethren, Analytical Graphics specializes in providing software that is off-the-shelf software and commercially available for a variety of different users: including national security and space professionals for integrated analysis of land, sea, air, and space assets. AGI’s tool kits, in the form of the navigation tool kit, the orbit determination tool kit and the highly popular STK product suite has allowed a generation of engineers and mission planners to plan elaborate missile and spacecraft operations with a sophisticated but easy of use GUI interface and 3D visualization.

Braxton Technologies LLC, www.braxtontech.com, HQ: Colorado Springs, CO

Founded in 1994

Founded by engineers Bill and Lorraine Simpson to build specialized command and control technology for weapons systems, today Braxton Technologies, LLC offers a diversified suite of TT&C products and professional services applied to satellite and weapon system command and control. Braxton’s software are used in a variety of government and commercial programs, including most notably in the Global Positioning System (GPS) Program’s launch, early-orbit, operations, and disposal command and control functions, which are currently performed by Braxton’s ACE Premier™ product suite. The ACE Premier™ architectural framework provides an infrastructure of configurable applications, tools, and simulators that reduce cost and accelerate deployment of command and control systems. Braxton software and capabilities are also involved in the Air Force’s next generation GPS command and control system, GPS OCX. Since 2008, Braxton Technologies has been owned by Colorado Springs private equity firm The O’Neil Group.

Command and Control Technologies Corporation, www.cctcorp.com, HQ: Titusville, FL

Founded in 1997

Command and Control Technologies Corporation was formed in 1997 to spin-off space operations automation technology developed for NASA. CCT provides real-time mission critical automation to help decision makers control their operations efficiently and effectively, including systems for range control, space launch, automated perimeter security, and industrial process control. Since the company's inception, CCT engineers have been leaders in the development of C4I technologies. This tradition of innovation continues with industry-leading automation products, as well as advanced technologies in areas such as situation awareness, generative communications systems, and configurable and extensible architectures.

Emergent Space Technologies, Inc., www.emergentspace.com, HQ: Greenbelt, MD

Founded in 2001

Emergent Space Technologies, Inc. provides consulting and engineering services to the civil, commercial, and military space industry around their competencies of spacecraft guidance, navigation and control, satellite ground systems, and space mission automation. Their aerospace systems and technology service offerings include guidance, navigation and control systems, astrodynamics and trajectory optimization as well as mission and spacecraft simulation and modeling. Emergent’s information systems and technology offerings include hardware-in-the-loop simulation, communications systems engineering and autonomous vehicle software. Emergent has provided ground systems and mission support to a variety of clients in the space systems industry, including Honeywell, Intelsat, Lockheed Martin and SGT, Inc.


Company Description

Glowlink Communications Technology Inc., www.glowlink.com, HQ: Los Altos, CA

Founded in 2000

Located in the San Francisco Bay Area, Glowlink maintains the vision of providing innovative, affordable satellite monitoring and power control products to support the efficient operation of satellite-based communications networks. To this end, Glowlink has developed innovative products and technologies to assist in satellite interference detection, geolocation, spectrum monitoring and link power control. In addition, Glowlink’s staff provide engineering services in the form of ground station architecture design, network planning and post deployment systems operations.

Integral Systems, Inc. (NASDAQ: ISYS), www.integ.com, HQ: Lanham, MD

Founded in 1982, 470 employees, 2007 Revenue: $128.7 million

Although small by the standards of the big aerospace prime integrators, Integral Systems is nevertheless the dominant player in the providing of satellite ground control systems and software. Their EPOCH Integrated Product Suite, a command and control system designed to operate any number of satellites from any manufacturer, provides an open architecture that allow satellite operators to monitor and control an entire communications system, including all ground equipment. Integral System’s subsidiaries offer a wide variety of ground systems solutions, including signal processing systems, satellite and terrestrial network management, telemetry hardware and RF signal monitoring systems

Integrity Applications Incorporated, www.integrity-apps.com, HQ: Chantilly, VA

Founded in 1999, more than 300 employees, Revenue: over $70 million

A geospatial services company, IAI’s expertise is in system engineering, system integration, system acquisition, and software integration, visualization and modeling and simulation expertise to operational and strategic elements of the U.S.’s Intelligence Community and Department of Defense. Specifically, they maintain expertise in intelligence, surveillance and reconnaissance systems, product quality analysis, ground systems, geospatial and photogrammetric analysis, unmanned systems and special communications systems. IAI also develops software applications focused primarily on web-based intelligence data visualization, exploitation tools and capabilities using the Open Source, GOTS and COTS software models.

Interferometrics, Inc., www.interf.com, HQ: Herndon, VA

Founded in 1982

INTERFEROMETRICS scientists, experienced analysts, engineers and satellite systems experts support space, telecommunications, intelligence, and military operations for the United States Government, including the Department of Defense, NASA, the Intelligence Community and other U.S. Government agencies. Among their many expertise include signal processing, data analysis and systems engineering, with a particular focus on optical and radio interferometry. The Transmitter Location Systems (TLS) subsidiary is an expert in the field of satellite interference geolocation. Systems and services available through this group enable customers around the world to pinpoint the location of transmitters to satellites. This capability locates inadvertent transmissions as well as intentional interference for malicious purposes. Through a global network of advanced TLS receiving stations, including 19 globally distributed locations, they are positioned to help protect satellite assets around the world. These facilities are remotely operable from anywhere in the world.

KinetX, Inc., www.kinetx.com, HQ: Tempe, AZ

Founded in 1992, 50+ employees

KinetX provides engineering services encompassing systems engineering, software / hardware development, network management, and satellite / space vehicle navigation. Their experience in earth orbiting and deep space missions covers a full range of program types in the in military, commercial and scientific missions. Among their very many mission consulting contracts include not only major satellite programs such as the GPS system, SBIRS, MUOS, the Iridium constellation and Intelsat, but also planetary missions such as Cassini, Genesis, New Horizons, MESSENGER and Galileo. KinetX’s first major consulting contract involved assisting Motorola in the development and implementation of the Iridium ground system. KinetX's role with Iridium later expanded to include software integration and test, hardware/software development, and constellation operation activities.


Company Description

Orbit Logic, Inc., www.orbitlogic.com, HQ: Greenbelt, MD

Founded in 2000

Orbit Logic provides mission planning software to organize and optimize scheduling for tasks particular to the operation of satellites, UAVs and imagery collection. Its Scheduler software, which is used for scheduling satellite operations, can plug right into AGI’s Satellite Tool Kit (as STK/Scheduler) and provides very complete operational control and set of analysis tools in a commercial off-the shelf package. Orbit Logic’s software is used in a wide variety of missions. Indeed, all current U.S. commercial imaging satellites use Orbit Logic software for recorder management and downlink planning.

Quantum Technology Sciences, Inc., www.qtsi.com, HQ: Cocoa Beach, FL

Founded in 1991

QTSI’s focus is in sophisticated detection, processing, and analyzing pattern signatures. These include time-based from seismic, acoustic, infrasonic, hydro-acoustic sources, and those in the non-time domain such as internet usage, technology export or even financial patterns. QTSI’s business is to analyze these signatures and rapidly generate and report actionable information. A central strength of QTSI is systems and software engineering, which involves developing the systems to meld together and analyze many disparate datasets and then quickly distribute relevant results.

Quartus Engineering Incorporated, www.quartus.com, HQ: San Diego, CA

Founded in 1997, over 60 employees

Quartus Engineering performs design, analysis, drafting, and testing services for production development, ranging from conceptual design through production drawings, using a broad suite of analysis tools and in-house capabilities. Quartus’ expertise has been used in a variety of industries and sub-sectors, including in aerospace launch vehicles, satellites, entertainment systems, amusement park attractions, consumer products, medical devices, avionics systems, and electronic components. In addition, Quartus’ offers personnel to complement the in-house projects of clients and also works to develop advanced methods and custom programs to improve engineering capabilities and productivity.

Satellite Services B.V., www.satserv.nl, HQ: Katwijk aan Zee, The Netherlands

Founded in 1985

Satellite Services B.V. is a system engineering house providing specialized engineering and products to the aerospace and industrial markets. The company has been involved in the design, development, production and support of specialized systems in satellite communication, testing & integration. Satellite Services offers a complete product development life cycle, including prototyping, qualification, production and international support. Satellite Services has been involved in over 35 different satellite programs and has a significant background in telemetry/telecommand, TT&C and remote sensing as well as a range of advanced simulation and testing systems and other ground support equipment.

SciSys PLC (LSE AIM:SSY)., www.scisys.co.uk, HQ: Chippenham, Wiltshire, UK

Founded in 1986, 2007 Revenues: ₤21.1 million

SciSys is a European developer of Information and Communications Technology services, e-Business and advanced technology solutions. The company operates in a broad spectrum of market sectors including space, utilities, defense, government, communication, business services and transport. Space activities of SciSys include monitoring and control of spacecraft, simulation and modeling of missions as well as development of on-board and flight dynamics software. Customers include the Environment Agency, Thames Water, Astrium, the European Space Agency and the Metropolitan Police. SciSys professionals have been involved in a variety of scientific missions, including the Rosetta comet mission, the XMM-Newton and Integral X-Ray telescopes and the Huygens mission to Saturn, amongst many other projects. The company has UK offices in Chippenham, Bristol and Reading and a European office in Darmstadt, Germany.

SPACEHAB, Inc. (NASDAQ: SPAB), www.spacehab.com, HQ: Houston, TX

Founded in 1984, 66 employees, 2008 Revenues: $25.5 million

Famous for its space shuttle payload and laboratory modules, SPACEHAB is now focused, though its Astrotech subsidiary, as a commercial supplier of satellite launch processing services in the U.S. Astrotech serves a range of expendable launch vehicles including Atlas, Delta, Pegasus, Sea Launch, and Taurus, as well as secondary payloads on the space shuttle. Astrotech, at its company-owned facilities, supports launches from NASA's Kennedy Space Center/Cape Canaveral Air Force Station and Vandenberg Air Force Base and provides processing services and support for the Sea Launch program. Astrotech has processed 230 satellites and is positioned to accommodate larger satellites and payload fairings. SPACEHAB is also more recently active with its SPACETECH service to incubate innovative new technologies, as well as its BioSpace service, to commercialize biotechnology products developed in microgravity.


Company Description

STAR Technologies Corporation, www.sdt-startech.com, HQ: Great Falls, VA

STAR Technologies Corporation has developed a variety of design and analysis tools in support of the design of dynamic systems including for spacecraft, launch vehicles, aircraft and missile systems. Premiere among their offerings is the Spacecraft Dynamic Tool (SDT), a graphical off-the-shelf solution for spacecraft and mission design and simulation. STAR Technologies has provided its services and software to many of the larger names in the satellite/space industry, including Allied Signal, CTA, Lockheed-Martin, General Research Corporation, United Technologies as well as government organizations such as DARPA, Strategic Defense Initiative (SDI), Naval Research Laboratory, NASA MSFC and GSFC.

the Hammers Company, Inc., www.hammers.com, HQ: Greenbelt, MD

Founded in 1990

the Hammers Company, Inc. provides software engineering services and products for the aerospace industry. These services include design and development of real-time satellite and instrument control software. Some of their software offerings include VirtualSat Pro, a tool for designers and analysts to simulate spacecraft and on-board instrument dynamics, and ITOS, a suite of software providing control solutions for spacecraft and spacecraft components. These software offerings currently support more than a dozen NASA missions and have logged over 15,000 hours of operation. The Hammers Company also supplies operations personnel for the control of satellites and Space Shuttle based experiments and provides core IT infrastructure support to its customers. Hammers software and services have provided support to many missions, including the Lunar Reconnaissance Orbiter mission to the moon, the Space Technology 7 tech demonstration mission and the SCISAT-1 atmospheric chemistry mission.

Universal Space Network, Inc., www.uspacenetwork.com, HQ: Newport Beach, CA

Founded in 1996

Universal Space Network Inc was founded with the goal of providing services that would make space more accessible. USN has built PrioraNet, a worldwide network of ground stations owned jointly with the Swedish Space Corporation, to provide tracking, telemetry and control services to a variety of missions and customers in civil, military and commercial space. Their business model allows them to operate and provide a fee-for-service in many cases where the only alternative would be a costly dedicated infrastructure. To this end, USN provides TT&C and data downlink services for satellites, launch systems and launch and early-orbit phase operations for spacecraft. USN also provides mission development and integration services in support of engineering and pre-launch activities.


Companies developing satellite components and subsystems Company Description

ABSL Power Solutions Limited, www.abslspaceproducts.com, HQ: Abingdon, UK

Founded in 1993

UK-based ABSL Space Products specializes in optical instruments and battery systems for extreme environments. Their batteries provide power to allow satellites and launch vehicles to operate on-board instruments and experiments, to remain in the correct orbit and orientation and to communicate with the Earth. Moreover, ABSL offers Lidar systems and specialist optical calibration instruments for space systems. ABSL Space’s sister company, ABSL Power Solutions provides a wide variety of rugged, high performance battery solutions for military, marine, oil and gas and industrial customers.

Aitech Defense Systems, Inc., www.rugged.com, HQ: Chatsworth, CA

Founded in 1983

Aitech specializes in providing advanced-technology Commercially-available Off-The-Shelf (COTS) products, customized products, subsystems integration and logistics for defense and aerospace customers. Applications range from mission computers, target acquisition and closed-loop fire control, and mission-display subsystems for ground vehicles, to surface and subsurface naval platforms, to tactical and strategic fixed- and rotary-wing aircraft, and launch booster, low- to high-earth orbit, and deep-space vehicles. Among Aitech’s many offerings include radiation tolerant single board computers, peripheral I/O boards, memory boards and enclosures. Many hardware elements are designed for “LEO, Mars Terrestrial with an Option for GEO Environments”

Andrews Space, Inc., www.andrews-space.com, HQ: Seattle, WA

Founded in 1999, >80 employees, 2006 Revenues $8 million

Andrews Space, Inc. was founded in 1999 to be a catalyst in the commercialization and development of space. The company is an affordable integrator of aerospace systems and developer of advanced space technologies. They have developed innovative solutions for government and commercial customers involving space transportation systems, technologies and components. Some of their activities include developing innovative new subsystems, such as reaction wheels, control moment gyros and power distribution systems, and designing whole integrated systems such as small satellite buses and hypersonic aeronautical platforms. In additional to its Seattle-based headquarters and Rapid Prototyping Laboratories, Andrews Space has offices in Colorado Springs, CO, Houston, TX, Huntsville, AL, Los Angeles, CA, and Salt Lake City, UT.

Applied Aerospace Structures Corp., www.aascworld.com, HQ: Stockton, CA

Founded in 1956 (originally Parsons), 270 employees

Applied Aerospace Structures Corp. (AASC), formally Parsons of California, has occupied the same site in the Central Valley of Northern California for almost 50 years. The company originally fabricated helicopter rotor blades and has maintained a focus on lightweight, high performance engineered structures since then. AASC’s specialty is in satellite structures, including reflectors, antenna towers, silicon substrates and thermal control structures and coatings. AASC is also active in aviation and ground structures, particularly radomes, fuel tanks, wing structures and composite structures for directed energy programs. Its products have found themselves on planetary spacecraft, commercial satellites, military programs and on numerous aircraft.

Astrolab, Inc., www.astrolab.com, HQ: Warren, NJ Founded in 1961

Astrolab, Inc. maintains a special expertise in precision connectors and components for high performance aerospace applications and harsh environments. Among their offerings include hermetic connectors and adaptors, coaxial to waveguide adaptors, phase shifters, semi-rigid cables, delay lines, quick-disconnect waveguide clamps and patented minibend®, mini141® and microbend™ flexible coax cable assemblies. Astrolab connectors have flown on a very wide variety of missions, including telecom satellites, the GPS system and aboard missions to Mars, Jupiter and Saturn. Astrolab products are also found aboard many different military aircraft, missile and shipboard systems.


Company Description

AZ Technology Corporation, www.aztechnology.com, HQ: Huntsville, AL

Founded in 1989, 35 employees

AZ Technology’s expertise is in high performance coatings and paints for the space environment. AZ Technology offers an existing line of paints/coatings with specialized optical properties for use on-flight hardware and terrestrial applications and can develop and produce paints with properties tailored to customer requirements. AZ coatings can be found on a variety of components and modules aboard the International Space Station, including on the NASA emblem, and aboard a variety of missions to study material properties. As a result of their expertise in specialized thermal control coatings, AZ Technology has developed a line of portable instruments for measuring the optical properties of materials; specifically, solar absorption, emittance, reflectance, and transmittance. AZ’s instruments have flown aboard the Mir space station. Their expertise allows them to offer services in materials measurement and testing for a multitude of space and non-space applications.

Bigelow Aerospace, LLC, www.bigelowaerospace.com, HQ: Las Vegas, NV

Founded in 1999

In large part self-funded by the considerable wealth of founder Robert Bigelow, Bigelow Aerospace has set itself an ambitious goal of developing and establishing commercial orbiting habitats built out of inflatable module technology. Bigelow has thus far proved highly successful, launching into orbit two test modules, Genesis-I and Genesis-II, with plans for a larger scale test space station, the Sundancer, in a couple of years and plans for a fully operational space station not long thereafter. The company’s capabilities are geared towards the implementation of these plans, with competencies in structures, materials, avionics, propulsion and life support systems.

Bradford Engineering B.V., www.bradford-space.com, HQ: TG Heerle, The Netherlands

Founded in 1984, 50 employees, Revenues €7 million

Situated in the Netherlands, Bradford Engineering B.V. specializes in engineering, design and development, production and test of spaceflight components and systems, with particular expertise in sensors, thrusters, and fluid systems. It has also been involved in the design and fabrication of microgravity science platforms and experiment boxes. Numerous Bradford products have flown in space, including significant contributions to the valves, fans and heat exchangers for experiment racks aboard the European Columbus module of the International Space Station.

Broad Reach Engineering, www.broadreachengineering.com, HQ: Boulder, CO

Founded in 1997

Broad Reach Engineering develops hardware and software for spaceflight missions and ground systems. Products include spacecraft avionics, science payload electronics, spacecraft flight software, ground and space borne GPS receivers for precision orbit determination (POD) and occultation science, ground support hardware and software, and mission design and analysis services. Broad Reach Engineering was founded by a group of aerospace engineers with the intent to provide innovative and cost effective products and services to the aerospace industry. Their first 10 years have shown steady growth with over 14 of their systems on orbit and another 3 in stages of integration and testing.

Canyon Composites, Inc., www.canyoncomposites.com, HQ : Anaheim, CA

Founded in 1995, 45 employees, Revenues $5 million

Canyon Composites’ expertise is in the machining and fabrication of unique composite aerospace and spacecraft structures. Since its founding in 1995, Canyon Composites, Inc has fabricated more than 201,000 spacecraft and aerospace parts and assemblies, including carbon composite components produced for prime satellite integrators and for missile systems. Expertise by Canyon’s engineering staff includes concurrent engineering processes, composite materials selection, production processing, and structural assembly, tooling and testing.

DR Technologies, Inc., www.drtechnologies.com, HQ: San Diego, CA


DR Technology’s key strengths include design and manufacturing expertise in composite structures and in precision components. They maintain extensive composite material fabrication facilities in California, Pennsylvania and Ohio. DR’s experience includes the fabrication of satellite structures (including a line of composite satellite antenna reflectors), interceptor missile structures, engine components, electronic structures, composite tubing and modular solar array platforms. DR has grown quickly, with 300% growth between 2002 and 2006, acquiring composite specialist Vector Composites along the way.


Company Description

Fibertek, Inc, www.fibertek.com, HQ: Herndon, VA Founded in 1980, over 125 employees, Revenues: $48 million

Fibertek, Inc. produces state-of-the-art lasers and electro-optics systems primarily for the military and aerospace markets. Among their many specialties include the design, development and manufacturing of advanced diode-pumped solid-state lasers and highly sophisticated electro-optical sensor systems. Their laser technologies are used in rangefinders, transmitters, obstacle avoidance Lidar systems and in other aerospace application. A Fibertek laser was used aboard the NASA CALIPSO spacecraft, a mission to measure global atmospheric aerosols from a space-based platform. This Fibertek laser has been successfully fired from orbit over a billion times.

Honeybee Robotics, www.honeybeerobotics.com, HQ: New York, NY


Situated in midtown Manhattan, Honeybee Robotics is an engineering firm that excels in automated systems. Honeybee builds large and small systems, fully automated and partially automated. Their experience has extended to building systems for extreme environments, both on and off Earth. Honeybee is considered a leader in developing drilling systems for planetary missions, experience which includes the famous Rock Abrasion Tool aboard the Mars Exploration Rovers. Past demonstrations of their capabilities range from developing a Nanometer Precision Actuator for use in deep space to designing a 65-ton Coca-Cola sign that operated in the variable outdoor climate of New York’s Times Square. More recent development have had them producing robotic solutions for resource extraction and mining in remote locations of the Earth. Honeybee Robotics tests systems in analog environments and, to this end, have traveled to Arizona, a quarry in upstate New York, Devon Island (in the Arctic Circle), and Spain’s Rio Tinto.

L’Garde, Inc., www.lgarde.com, HQ: Tustin, CA

Founded in 1971

L'Garde was founded with the mission to analyze, design, manufacture, test and fly inflatable space structural systems. To that end, they have been developing materials, analytical methods and codes, packaging and deployment methods, process initiation, release and inflation mechanisms and methods, interfaces to mechanical rigid structures, and instrumentation for inflatable space structures. Since 1971, L’Garde has had over 150 inflatable objects designed, manufactured and successfully flown in orbit. Parabolic antenna reflectors, large deployable photovoltaic arrays and solar sail components are among the many inflatable structures developed by L’Garde.

Malin Space Science Systems, Inc., www.msss.com, HQ: San Diego, CA Founded in 1990, 30 employees

Founded by scientist and principal investigator for many planetary missions, Dr. Michael C. Malin, Malin Space Science Systems has become the foremost developer of imaging systems for planetary missions, especially to Mars. Systems under their belt include the Mars Global Surveyor Orbiter Camera, the Mars Reconnaissance Orbiter Colour Imager, the Phoenix Mars Lander Descent Imager and the Lunar Reconnaissance Orbiter Camera. MSSS has also participated in mission to asteroids and will be participating in a forthcoming mission to Jupiter.

Marotta Controls, www.marotta.com, HQ: Montville, NJ Founded in 1943

Marotta designs and manufactures fluid control systems, components and actuators designed for aerospace, military, space and industrial markets. Applications include aircraft hydraulic systems, high-pressure pneumatics and smart fluid systems on Navy ships, and reaction control systems on launch vehicles and small satellites. Marotta has had the privilege of providing components for some of the most famous accomplishments and figures in aerospace, including valves on Chuck Yeager’s X-1 supersonic aircraft and aboard the Apollo Service Module to the moon.

Maxwell Technologies, Inc. (NASDAQ: MXWL), www.maxwell.com, HQ: San Diego, CA


Maxwell Technologies Microelectronics is a leader in providing semiconductor components and single board computers for military and space. They are also the world's largest supplier of high-voltage grading and coupling capacitors for electric utility infrastructure. Maxwell’s radiation-mitigated microelectronic products include power modules, memory modules and single board computers that incorporate powerful commercial silicon processors for superior performance and high reliability in aerospace applications. Since 2006, they have maintained an alliance with Belton Technology Group to produce their brand of ultra-capacitors in China.


Company Description

Media Lario Technologies S.r.l., www.media-lario.com, HQ: Bosisio Parini, Italy

Founded in 1993

Media Lario Technologies supplies high-precision reflective optical components and systems for advanced applications in semiconductor lithography, semiconductor processing, space & terrestrial astronomical science, and medical & life science devices. Media Lario’s optical instruments thereby serve a broad radiation spectrum from X-ray to millimeter waves. They have long-standing relationships with many civil space organizations, including NASA, ESA and the Italian Space Agency. Media Lario has participated in missions such as orbiting X-ray telescope XMM-Newton (where they served as prime contractors) as well as the Italian BEPPO Sax mission and on NASA’s SWIFT and Integral projects. Notable investors in Media Lario include Draper Fisher Jurvetson, Intel Capital, Quan Ventures, PolyTechnos, TLcom Capital and Vision Capital.

Michigan Aerospace Corporation, www.michiganaero.com, HQ: Ann Arbor, MI

Founded in 1996, 30 employees, est. 2007 Revenues: $5.5 million

Michigan Aerospace Corporation is an advanced engineering and products company that provides innovative optical, opto-mechanical, and mechanical components, as well as image processing, pattern recognition, and machine learning software, from conceptual design through production and implementation in the field. Its products and services are used aboard space systems, air data systems, optical diagnostics and near space applications Michigan Aerospace is a provider of Lidar systems for atmospheric measurements, optical air data systems, tunable etalons, nano-positioning systems, 2D and 3D data exploitation software tools, docking mechanisms for spacecraft, launch and retrieval systems for marine applications, flight qualification services, rapid prototyping and engineering services to meet demanding laboratory, aircraft and spaceflight needs.

Neptec Design Group, Ltd., www.neptec.com, HQ: Ottawa, ON, Canada


A Canadian firm, Neptec Design Group is a supplier and integrator of machine vision systems for space applications. A NASA prime contractor since 1995, Neptec has supplied operational systems to both the Space Shuttle and International Space Station programs. Neptec’s technology offerings also include active 3D imaging systems and 3D processing software, which led to the development of the Laser Camera System, an operational system used by NASA to inspect the shuttle's external surfaces during flight. Neptec also offers a proprietary system, known as TriDAR, which is a unique design that combines a high precision, short range triangulation sensor with a long range Lidar sensor for automated on-orbit rendezvous, inspection and docking.

Optech Inc, www.optech.ca, HQ: Vaughan, ON, Canada


Canadian-owned and operated, Optech Incorporated develops, manufactures and provides support for advanced laser-based surveying, mapping and imaging instruments. Its product and service offerings are active in a variety of market verticals, including terrestrial survey, marine survey, industrial & 3D imaging as well as space and advanced technology. Each division of Optech shares the mission of designing and manufacturing precision instruments that utilize light detection and ranging. Instruments developed by Optech have flown aboard the Mars Phoenix Lander and the Air Force autonomous rendezvous demonstration mission as well as very many terrestrial, marine and industrial applications around the globe.

Orbital Technologies Corporation, www.orbitec.com, HQ: Madison, WI


Born out of the Astronautics Corporation of America and the Battelle Columbus Laboratories, ORBITEC is a subsystems integrator and technology development company with capabilities in five areas: (1) propulsion, space resources, and energy systems, (2) emergency response systems, (3) human support and instrumentation systems, (4) bioproducts and bioproduction systems, and (5) interactive 3D systems and services. ORBITEC is focused on those technologies that will enable the inhabitation of space (such as resource utilization, bioproduction and life support) as well as assisting challenges on the ground (such as fire control and rescue).


Company Description

Paragon Space Development Corporation, www.paragonsdc.com, HQ: Tucson, AZ


Founded by veterans of the famed BioSphere2 plus a couple of their associates, Paragon Space Development Corporation is a full-service aerospace engineering and technology development firm and a major supplier of Environmental Control and Life Support System (ECLSS) and subsystem design for the aerospace industry. Paragon also specializes in thermal control both for spacecraft on orbit and during re-entry, and for hyper-velocity aircraft. Their products include complete ECLSS, subsystem assemblies, including pressure control systems, life support systems for microgravity life science experiments as well as thermal control products. Some of their projects include life support technology for Virgin Galactic’s suborbital space missions and thermal systems for NASA‘s Orion spacecraft. Paragon also maintains its ECLSS Human-rating Facility, a unique 180 cubic-foot altitude chamber, capable of simulating cabin air pressures throughout any flight profile.

Quallion LLC, www.quallion.com, HQ: Sylmar, CA


Quallion produces primary and rechargeable lithium ion cells and battery systems for use in medical, military and aerospace markets, with activity divided evenly between these three markets. Their high capacity cells and battery systems have been designed for a variety of uses, space and otherwise, including use aboard launchers, satellites, aircraft and deep space missions. Quallion has maintained an historical production rate of over 60 thousand units per year with capacity of 200 thousand units, and is one of the largest manufacturers of lithium ion cells outside of Asia. Their cell offerings range from what is the world’s smallest conventional lithium ion cell for implants to larger scale prismatic cells.

SEAKR Engineering, Inc., www.seakr.com, HQ: Centennial, CO

Founded in 1983, approximately 200 employees

SEAKR Engineering was founded with the goal of using solid-state technologies as an alternative storage media for spacecraft memory systems. From this start, they have continued their leading work by supplying solid state recorders and electronics for many spacecraft systems. SEAKR now has an expanded product line, encompassing space-based data handlers, command and data handling units, satellite communication avionics, power supplies and reconfigurable computers. Since their first project in 1983, that for a magnetic memory recorder for an Air Force weather satellite, SEAKR has delivered over 100 memory/processing systems for spacecraft, with over 60 units launched. SEAKR takes pride in the fact that, in all of their delivered units, none has ever experienced an on-orbit failure.

Space Micro Inc, www.spacemicro.com, HQ: San Diego, CA

Founded in 2002

Space Micro Inc. provides radiation-hardened-by-design solutions for advanced electronic systems, with an emphasis on microelectronics, sensors, computers and MEMS. Space Micro is also active in microwave and RF components as well as advanced materials and coatings for high performance aerospace applications. Research activities include design solutions for single event effects (SEE) in microelectronics, plus discovering new methods for improving performance of high performance space computers, such as those used by companies and government agencies. Space Micro’s clients include NASA, the Missile Defense Agency and the US Air Force.

Stellar Microelectronics, Inc. www.stellarmicro.com, HQ: Valencia, CA

Founded in 1974

Stellar Microelectronics, Inc. is an electronics manufacturing services provider, specializing in advanced custom packaging solutions utilizing microelectronics technologies. Services include engineering, product development, and turnkey production services, providing processing capability from wafer to final product assembly. Stellar processes and tests die, components, circuit card assemblies, and their final product with post-delivery support services. For their large space clientele, Stellar provides engineering, design, wafer processing, hybrid manufacturing, Chip-On-Board, electronic circuit card assembly and testing. Both military and commercial satellite manufactures depend on Stellar to meet demanding requirements needed for electronics in space systems.


Company Description

TiNi Aerospace, Inc., www.tiniaerospace.com, HQ: San Leandro, CA

TiNi Aerospace, Inc. is a manufacturer of aerospace mechanisms employing Shape Memory Alloy (SMA) materials, the most common of which is an alloy of Titanium and Nickel or TiNi. Among the products developed and manufactured are a family of high force release devices called the Frangibolt, an array of fast acting Pinpullers, and a variety of other SMA Actuators. These devices are used to secure spacecraft deployables during launch and then to release them on command once in orbit. Typical applications include hold down and release of solar panels, antennae, instrument cover doors, booms, heat shields, radiators, isolation systems, tether experiments, and other spacecraft components. To date, TiNi has manufactured and delivered over 1000 release mechanisms. TiNi products have been used on missions as the Clementine mission to the moon, the Mars Global Surveyor Spacecraft, and the Lunar Prospector. They have also been used on numerous other commercial and government satellites flown for conducting scientific experimentation, earth observation, and increasingly for telecommunication purposes.

Toyon Research Corporation, www.toyon.com, HQ: Goleta, CA


Toyon Research Corporation has built a strong and multi-faceted expertise in defense and security systems, missile systems, C4ISR and space electronics and in communications systems. Toyon has been active in missile defense, SATCOM systems and anti-jam GPS antennas. Within its space and satellite capabilities, Toyon develops innovative antenna and reflector systems employing specially designed concepts involving radar and inflatable structures. Toyon’s facilities include microwave, electronics, and antenna prototyping laboratories.

Yardney Technical Products, Inc, www.yardney.com, HQ: Pawcatuck, CT

Founded in 1944

Based in southeastern Connecticut since 1944, Yardney prides itself in the design, development and manufacture of advanced custom batteries for military, aerospace and industrial purposes. Their specialty battery technologies include Yardney Technical Products (YTP) Silver-Zinc, Silver Cadmium, Nickel-Hydrogen, and Magnesium-Silver Chloride batteries, and Lithion’s Lithium-Ion cells and batteries. Yardney’s batteries have flown aboard Delta II launchers, the Mars Exploration Rovers and Phoenix Mars Lander, the IBEX interstellar probe and have swam through the deep aboard naval torpedoes, as well as many other missions in extreme environments. Yardney has also been selected by Lockheed to provide Lithium-Ion batteries for the future Orion Crew Exploration Vehicle.


Notable transactions

Companies involved in small satellites Target Acquirer Month Transaction value and financials

Surrey Satellite Technology Limited EADS Astrium Dec 2008 Not provided

"In the UK we are renowned for our design and manufacture of telecommunications satellites, interplanetary spacecraft and satellite services provision. SSTL is one of the great success stories of the UK space industry and will be a substantial complement to what we can offer customers around the world with its expertise in small and micro satellites and their innovative approach to developing new markets for space," said Colin Paynter, CEO of Astrium in the UK.

SpaceDev, Inc Sierra Nevada Corp Dec 2008 $26.6 million, TTM Revenues: $37.6 million

“The acquisition of SpaceDev, which has a tremendous space heritage with products that have flown on 250 spacecraft, represents a dynamic expansion of SNC’s space technology capabilities, proven system integration, communications, networking and intelligence capabilities in the space sector,” said Fatih Ozmen, Chief Executive Officer of SNC.

MicroSat Systems Sierra Nevada Corp Jan 2008 Not provided

MicroSat Systems is a leader in the small satellite market and has developed a line of spacecraft products that has the potential to be a disruptive technology. MicroSat Systems is providing reliable and capable spacecraft at an affordable price with only an 18-month lead time. The missions they support are not necessarily as complex as larger spacecraft, but for the price and schedule they still meet important needs. MicroSat Systems provides the space industry a product line of small satellite buses based on a modular bus design that has proven flight success.

AeroAstro, Inc. Radyne Aug 2007 $18 million, 2006 Revenues: 12.4 million

AeroAstro designs and builds small and microsatellites and related technologies, AeroAstro’s experience spans a range of capabilities – from ultra-low-cost R&D programs using commercial components, to high-reliability programs using space-qualified components. In addition to spacecraft equipment, AeroAstro developed and operates the Sensor Enabled Notification System (SENS), which provides cost effective satellite based low data rate communications and asset tracking throughout the United States, North America, Europe, Australia, the Middle East, Asia, and South America.

Swales Aerospace ATK June 2007 $101.2 million, 2005 Revenues: $193 million

Swales Aerospace is a premier provider of satellite components and subsystems, small spacecraft and engineering services for NASA, Department of Defense and commercial satellite customers. The transaction is subject to Hart-Scott-Rodino (HSR) review and approval by a majority of the shareholders in the employee-owned company. After receiving HSR and shareholder approval, ATK will be a leading provider of satellite components, subsystems and small spacecraft. The acquisition will further increase the company's position as the partner of choice to the Government and industry.

Verhaert Design and Development NV QinetiQ Sept 2005 Not provided

Verhaert Design and Development NV (VDD) is a subsidiary of the Verhaert Group of companies based outside Antwerp in Belgium. VDD is the leading Belgian small space systems integrator. Established for over 20 years VDD develops advanced small space systems for the European Space Agency, large systems integrators and governments. VDD provides advanced small satellites, docking and ejection systems, and instruments and facilities for micro-gravity research in manned and unmanned space missions.

Nanospace AB Swedish Space Corporation June 2005 Not provided

Nanospace was set up to develop silicon-based microsystems such as microthrusters for precise attitude and formation flying control and Xenon feed systems for electric propulsion. The company was formed by the inventor and Swedish space technology pioneer Lars Stenmark, professor of space technology at Uppsala University. The work on these products at Uppsala is supported by contracts from the European Space Agency.

Spectrum Astro General Dynamics July 2004 Not provided

Spectrum Astro manufactures and integrates space systems, satellites and ground-support equipment, and has approximately 525 employees. It is now part of General Dynamics C4 Systems, which has nearly 3,400 employees in Scottsdale, Ariz. "Spectrum Astro brings General Dynamics valuable experience in missile- defense and key NASA space business segments, and further enhances our ability to meet requirements for satellite-based systems in support of a network- centric approach to warfighting," – Mark A. Fried


Companies providing mission support services and products Target Acquirer Month Transaction value and financials

Interface and Control Systems SRA International, Inc. Jul 2008 $8.5 million

ICS has built a track record of success with its Spacecraft Command Language, Remote Intelligent Monitoring, SensorMiner, Autonomous Tasking Engine and On-Orbit Checkout Engine products. Its software is a key element of the National Aeronautics and Space Administration's (NASA) Constellation project and the Defense Department's tactical satellite (TacSat) program. The acquisition of ICS furthers SRA's strategy of broadening its product and service offerings while expanding operating margins.

Payload Systems Inc. Aurora Flight Sciences Corporation Oct 2007 Not provided

Payload Systems was founded in 1984 with a mission to provide science and engineering services for spaceflight and terrestrial applications. The company has been involved in the successful flight of over 28 space missions. Among these is a miniature constellation of free-flying satellites known as SPHERES, which Payload Systems built for MIT and which is currently deployed aboard the International Space Station. Payload Systems’ extensive experience with NASA integration, safety, certification and acceptance procedures has given the company a proud record of accomplishment

TRL Electronics plc L-3 Communications Jul 2006 GBP 95.9 million

TRL offers some of the most advanced radio and satellite communications systems available, providing governments and defense organizations around the world with the tools to trace, locate, monitor and defend transmissions, as well as to communicate securely. TRL reported sales of GBP 14.0 million (approximately US $26.3 million) for the six months ended September 30, 2005.

ENERTEC The Zodiac Group Apr 2006 Expected sales of €20 million

Enertec, which is based in the Paris region, specializes in the acquisition, storage, processing and exploitation of civil and military aerospace data. It has the potential to generate sales of around €20m p.a. The newly acquired company will be integrated with IN-SNEC, a subsidiary of the Zodiac Group specializing in telemetry and telecommunications in the Technology Segment. This acquisition will strengthen the Group's leadership in the European market for satellite ground control systems and onboard telemetry recorders

Photon Research Associates Raytheon Oct 2004 Not provided

PRA has pioneered the development and application of physics-based modeling, simulation and analysis products and services for government and commercial markets. The company focuses on remote sensing, missile defense, surveillance and reconnaissance and intelligence data analysis.

RT Logic Integral Systems, Inc. Oct 2002 $36.5 million with $10 million earnout

RT Logic designs, develops, and delivers innovative signal processing systems for the space and military communications industry. RT Logic's Telemetrix® product line is used for satellite test, launch vehicle telemetry, on-orbit satellite control, as well as Satellite Communications (SATCOM), airborne communications, and spectrum monitoring/interference detection.

Newpoint Technologies Integral Systems, Inc. Jan 2002 Not provided

Newpoint is based in Salem, N.H., that provides software and equipment for satellite support systems for Internet, broadcast and telecom networks. Its principle customers are satellite, telecom and broadband providers.


Companies developing satellite components and subsystems Target Acquirer Month Transaction value and financials

CSA Engineering Moog May 2008 $14.8 million, 2007 Revenues: $14 million

CSA's engineering staff designs and supplies equipment to the space, defense, aircraft and industrial markets. CSA's specialized applications include satellite payload isolation systems, ground based test systems for space and missile hardware, tuned mass dampers for vibration control and a jitter reduction control system for the Airborne Laser optical bench.

Alliance Spacesystems MacDonald Dettwiler Dec 2007 Not provided

Alliance is a leading provider of robotics, custom design and fabrication in composites structures, mechanisms, mechanical systems engineering, and mechanical analyses for systems operating in extreme environments. Alliance Spacesystems provides U.S. Government and aerospace customers with advanced technology solutions and is a leader in sophisticated robotic and mechanical structures applied on a variety of space missions as well as terrestrial applications.

SUMMA Technology Inc AAR Corp Dec 2007 Not provided

Summa Technology, Inc., ("Summa"), a leading provider of high-end sub-systems and precision machining, fabrication, welding and engineering services. The acquisition of Summa builds upon AAR's wide range of capabilities and extends the Company's portfolio of manufactured products and engineering services.

Kayser-Threde GmbH OHB Technologies Jun 2007 €5.95 million

Kayser-Threde GmbH ranks among the three largest space companies in Germany and specializes in the development and implementation of payloads, scientific devices, and equipment for aerospace, science, and the industry. Kayser-Threde GmbH provides support over the complete life cycle of a scientific device for manned and unmanned spaceflight missions, from feasibility study and the development of hardware and software up to mission support and data interpretation

SBS Technologies GE Fanuc June 2006 $215 million, 2005 Revenues: $152.4 million

SBS (Nasdaq: SBSE) designs and builds embedded computer components for the medical, aerospace, military, transportation and telecommunications industries. Last fiscal year, ending June 30, the company reported sales of $152.4 million, up from the previous year's $133.9 million. The company has locations in California, Massachusetts, Minnesota and North Carolina, as well as Canada, China and Germany.

SSG Precision Optronics L-3 Communications Apr 2006 Expected annual sales of $60 million

SSG Precision Optronics, Inc. is a recognized leader in the world of space and airborne telescopes and electo-mechanical subsystems. The company develops key technologies and designs for applications in strategic and tactical optical systems and continues to invest and pursue R&D opportunities.

Starsys Research Corporation SpaceDev Feb 2006 $33.8 million (with earn-out)

2005 revenues of $18 million

Starsys designs, engineers and manufactures mechanical systems, structures, and mechanisms that open, close, release, and move components on spacecraft, including motion-control actuators, cover systems, deployment systems, and separation systems. Starsys components have flown on over 200 missions including the Mars Rover missions, Cassini, and Deep Impact with 100% operational success

Dutch Space BV EADS Dec 2005 Not provided

Dutch Space, formerly part of the Fokker group, was established as an independent company in 1995, and has nearly 300 employees. The company’s core business areas are robotics, space instruments, launchers and solar arrays. In spacecraft solar arrays, the company’s range extends from telecoms and science to Earth observation applications. Dutch Space’s unique expertise in lightweight, rigid and strong structural components has led to close involvement in the Ariane launcher development and production programme.

Cincinnati Electronics L-3 Communications Dec 2004 $172 million

Headquartered in Mason, Ohio, Cincinnati Electronics designs and manufactures a range of infrared (IR) detectors, imaging sensors, missile warning systems, space launch vehicle products and spacecraft electronics. These operations provide IR components, electronics, and systems reconnaissance, navigation and missile seekers for a number of U.S. launch vehicles and spacecraft electronic niche markets.


Target Acquirer Month Transaction value and financials

PSI Group ATK Sept 2004 $165 million, 8x EBITDA

The PSI Group is a leader in the design and manufacture of components for military and commercial space-based applications, including global positioning, navigation and communication satellites, satellite bus structures, struts, reflectors and deployable mast booms. The acquisition strengthens ATK's advanced space systems portfolio and positions it to capture emerging opportunities in spacecraft integration and satellite technology.

Composite Optics Inc. ATK Jan 2003 Not provided

Composite Optics Inc. (COI), a supplier of advanced composite products for the space and aerospace markets. COI (San Diego) manufacturers such products as telescope structures, optical benches, mirrors, instrument housings, satellite structures, and antenna reflectors; they will be integrated with ATK's existing composite structures operations.


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