Canadian Earth observation company UrtheCast has announced plans for a 16 satellite low Earth orbit imaging constellation. It is partnering with Surrey Satellite Technology Ltd (SSTL) on the project, with the satellites expected be launched in 2019 and…
Canadian Earth observation company UrtheCast has announced plans for a 16 satellite low Earth orbit imaging constellation. It is partnering with Surrey Satellite Technology Ltd (SSTL) on the project, with the satellites expected be launched in 2019 and 2020.
At the same time, UrtheCast revealed that it has entered into a definitive agreement with Spanish engineering group Elecnor to acquire its Deimos Imaging business, including the Deimos-1 and -2 remote sensing satellites.
UrtheCast will pay €74.2m (US$83m) in cash for the two satellites, their operations and full imagery archive. The company will pay an initial €69m (US$77.2m) on closing, which is expected on or before 21 August, and then a further €5.2m (US$5.8m) over the next five years.
Together the acquisition and constellation plans will transform UrtheCast from the owner of two satellite imaging cameras fixed to the International Space Station to the operator of a small satellite constellation in the rapidly growing Earth observation market.
SSTL to build unique optical/radar constellation
UrtheCast and SSTL have been in discussions for several months over the design of a new high performance LEO platform that will differentiate it from the other small satellite EO constellations that have been announced over the past year or so.
The system that is to be built will be the world’s first fully-integrated, multispectral optical and Synthetic Aperture Radar (SAR) commercial satellite constellation. SAR is an active imaging sensor technology that can penetrate cloud cover.
The 16 satellite plan comprises eight optical and eight SAR spacecraft flying in two orbital planes, mid-inclination and sun-synchronous. Each plane consists of four satellite pairs, equally spaced around the orbit plane, with each pair split between a dual-mode, high-resolution optical satellite and a dual-band high-resolution SAR satellite (X-band and L-band).
UrtheCast stated that by flying the satellites in tightly paired SAR and optical tandem formations, the constellation can offer a number of features that its rivals cannot. These include on-board real-time processing, cross-cueing between the satellites, and real-time cloud imaging on the leading SAR satellites that enables cloud avoidance in the trailing optical satellites.
SSTL will design and build both the satellite platforms and the high resolution optical imagers. The company will also help in securing the launches in 2019 and 2020. Financial details for the strategic partnership have not been disclosed.
To fund the system, UrtheCast has entered into a number of MoUs with potential customers and partners, including one from a confidential customer to provide US$195m of funding for the constellation during its build phase. The company added that as these MoUs are successfully converted to binding definitive agreements, these customers will provide further support and funding for the programme.
Commenting on the announcement, UrtheCast’s president and COO, Wade Larson, said: “We’ve been working on the constellation for over a year now and we’re delighted by the market reception we’ve had. We’re confident that the constellation will bring an entirely unique dataset to this industry and, frankly, given the response we’re getting around the world, our customers agree.”
Patrick Wood, group managing director of SSTL, added: “The dual optical/radar constellation created by UrtheCast will be a game changer for the Earth observation market. SSTL is ideally placed to design and build the UrtheCast satellites, having made a substantial investment in new automated production facilities geared to constellation manufacture. As strategic partners in this venture, we see this initiative as a perfect marriage that exploits SSTL’s satellite manufacturing capacity and UrtheCast’s downstream data services.”
Acquires Deimos Imaging
Prior to the launch of the new constellation, Urthecast will take control of the Deimos-1 and -2 satellites having acquired them and their image archive from Elecnor.
The transaction was carried out by a wholly owned subsidiary, UrtheCast International Corp, which entered into a share purchase agreement with Elecnor and Deimos Space to acquire the outstanding shares of Deimos Imaging and DOT Imaging (collectively known as ‘DOT-Deimos’). DOT-Deimos owns and operates the two satellites and their archive.
The satellites predominantly focus on Europe and Latin America, and their customer base comes from the same regions. The European Space Agency and a number of European governmental agencies are among their clients.
Deimos-1 was launched in 2009, provides 22-metre resolution images and has a collection capacity of more than 5 million km2 per day. Deimos-2 was launched in 2014, provides 75 cm pan-sharpened images and has a collection capacity of more than 150,000 km2 per day.
UrtheCast believes that by combining these spacecraft with the imagery it collects from its cameras on the ISS, it can quickly accelerate its EO strategy. The company has been operating a medium resolution camera (MRC) on the space station since 2014, while an ultra HD camera is due to begin operating this summer.
Alongside collecting more and better quality satellite imagery, UrtheCast’s future strategy is centred on its development of a source agnostic, cloud-based ingestion platform, to display, exploit and distribute satellite imagery and video. The system is expected to become commercially available in 2016 and will utilise the recently acquired Deimos satellite imagery archive as well as from the ISS cameras and external sources.
Scott Larson, UrtheCast co-founder and CEO, said: “This is an incredible acquisition that epitomises technological and operational synergy. By adding these satellites to our suite of sensors available via our web platform, significantly expanding our space operations capability – important for our recently announced SAR and Optical constellation – and merging our business development, UrtheCast is rapidly accelerating its mission to democratise Earth observation imagery, and bring a unique dataset and distribution model to customers and users that up until now, has not been available anywhere in the marketplace.”
Larson also said that the company views the acquisition as highly accretive, with Deimos estimated to contribute revenues of between C$20-25m (US$16.2-20.2m) and EBITDA of C$11-15m (US$8.9-12.1m) in 2016.
Founded in 2010 by brothers Scott and Wade Larson, and George Tyc, UrtheCast listed on the Toronto stock exchange in June 2013 following a reverse takeover of Longford Energy, an oil and gas exploration company in Iraq.
Raymond James acted as financial adviser to UrtheCast in connection with the acquisition and provided a fairness opinion to the board of directors.
Funding the acquisition
While UrtheCast expects to fund much of the new constellation through its customer deals, the all-cash acquisition is being financed by a mix of debt and newly issued equity.
The company has entered into a bought deal agreement with a syndicate of underwriters led by Raymond James to purchase 21,625,000 subscription receipts at C$4 per receipt, generating gross proceeds of C$86.5m (US$70.1m). Each receipt entitles the holder to one common share of the company.
UrtheCast has agreed to grant the underwriters an over-allotment option of up to 3,243,750 additional subscription receipts. If exercised in full this would raise an additional C$12.9m (US$10.5m).
At the same time, an unnamed New York based alternative investment management fund is to provide C$50m (US$40.5m) in debt.
