Redwire Space is made public through a SPAC after a year of acquisitions

Space infrastructure conglomerate Redwire Space is gearing up to go public, announcing Thursday that it is the latest in a series of space companies to merge with a SPAC.

Redwire, formed last year by private equity firm AE Industrial Partners, merges with special-purpose acquisition company Genesis Park, which is listed under the GNPK brand. The deal is expected to be finalized by the end of the second quarter, with the merger leading to Redwire listing on the New York Stock Exchange.

An SPAC is essentially a shell company that raises money through an initial public offering to acquire another company. Shares of Genesis Park rose more than 5% in premarket trading after the announcement, from its previous close of $ 9.87 per share.

“When you look at the industry now, you have a lot of the older traditional space players and you have a lot of these new entrants into the space, a lot of them are pre-revenue,” said Peter Cannito, president and CEO of Redwire, on CNBC.

“Redwire is a kind of hybrid: we offer this midpoint of a huge flight heritage but also disruptive technologies.”

The company focuses on space infrastructure, which at the time is a $ 15 billion market.

Redwire’s business collection includes technologies such as navigation sensors, solar arrays, drop-down structure, space manufacturing, and robotic arms.

The conglomerate expects to add about $ 170 million in cash to the balance sheet of the merger. This would include revenue from a $ 100 million PIPE round (or private equity investment), which is joined by investors Senvest Management and Crescent Park.

The merger values ​​Redwire at a business valuation of $ 615 million, according to the companies. Cannito noted that AE Industrial Partners will “maintain a significant investment” after the merger, as the largest sole shareholder.

Since AE formed Redwire last June, the company has been in the midst of acquisitions.

Redwire first acquired the satellite components business Adcole Space and aerospace company Deep Space Systems and then acquired Made In Space, a 3D printing specialist.

The conglomerate also secured satellite technology firm Roccor, engineering service LoadPath, modular spacecraft builder Oakman Aerospace and satellite mechanism company Deployable Space Systems.

Altogether, according to Redwire, the combined management teams bring more than 50 years of space experience, with more than 150 missions.

“We have taken a very differentiated market approach by combining different companies with an extraordinary flight heritage,” Cannito said.

These companies are “used to being the first mission partner for organizations that are deploying space-based capabilities,” he added, whether they are partners at NASA, Pentagon or others.

Redwire believes there will be more business ahead, said Cannito, who noted that going public and “having that public capital as a currency significantly increases our attractiveness as an acquisition platform.”

“This allows us to be opportunistic and continue with our already proven track record of mergers and acquisitions,” Cannito said. “I think we will try to achieve bigger goals and that gives us the opportunity, with the flexibility to do it as needed.”

Redwire had revenue of $ 119 million last year, which is expected to grow to $ 163 million in 2021. The company sees it accelerating revenue to more than $ 1.4 billion in 2025, which Cannito said will be based on their products.

“Dollars can pivot from government to commercial, and then our profile, in terms of our customer mix, will pivot along with it. So it gives us a lot of staying capacity. It allows us to be flexible, adjust- us and transform us as the market changes, ”Cannito said.

Redwire has a positive cash flow and expects its profitability to continue and grow to nearly $ 200 million in free cash flow by 2025.

“Our strategy is really to be the main partner of the mission,” Cannito said.

Cannito also emphasized the reduction in the cost of access to space, as well as the growing number of rocket builders launching into orbit, as an additional catalyst.

“We are really excited and have a lot of respect for what SpaceX has done with the introduction of a cheap reusable launch. We are also excited about the rest of the launch providers that have entered this space and have done so now, and as resulting in increased competition, reduced launch cost. Now there are many options, “Cannito said.

“I think there is a direct correlation between the reduction in launch costs and the demand for space infrastructure,” he added.

Overall, Cannito presented his company as a company that is in the middle of the space economy, which has grown to exceed $ 420 million.

“When space wins, Redwire wins,” Cannito said.