Canadian space technology firm MacDonald, Dettwiler and Associates (MDA) has netted around C$250m through a share offering as part of plans to rebalance its capital structure. The company agreed to sell 3,605,000 of common shares from treasury, roughly…
Canadian space technology firm MacDonald, Dettwiler and Associates (MDA) has netted around C$250m through a share offering as part of plans to rebalance its capital structure.
The company agreed to sell 3,605,000 of common shares from treasury, roughly 10% of its outstanding share capital, at C$69.40 each in an underwritten process led by RBC Capital Markets, BMO Capital Markets and TD Securities. There is also an overallotment option that could see MDA sell a further 540,750 shares, which would raise roughly C$38m.
As well as giving MDA a tidy profit – the company purchased some ten million shares at C$53 each back in 2011 – CFO Anil Wirasekara told SatelliteFinance that the move will help it reduce its indebtedness following last year’s acquisition of Space Systems Loral, the US satellite manufacturer.
“We have been looking to rebalance our capital structure as we think it is not at its maximum efficiency,” said Wirasekara.
“We also borrowed some more to do the Space Systems Loral transaction so now we need to balance this.”
MDA will likely use the proceeds to buy back a portion of the C$1.1bn credit facility that partially funded the Loral deal. This facility is split into a long-term debt piece provided by three insurance companies, and a four-year short term loan and revolver provided by a syndicate of banks.
Wirasekara said: “Our sweet spot is to have a leverage ratio of two times EBITDA. This gives us the flexibility to add an extra one, 1.5 times if we need to do something transformational like the Loral deal.”
The company expects to close the share offering towards the end of March.
Announcing full year results in February, MDA said its acquisition of Space Systems Loral helped give it a funded order backlog of C$2.2bn at the end of 2012, compared with C$805m a year earlier.
It posted full year revenues of C$880m compared with C$761m for 2011. Operating earnings for 2012 increased to C$127m from C$117m.
MDA also announced it had secured two major contracts with satellite imagery provider DigitalGlobe, which in early 2013 completed its transformational merger with rival GeoEye.
The first contract will see MDA upgrade systems to support the operator’s upcoming WorldView-3 satellite. It said this spacecraft will be the first multi-sensor, super-spectral, high resolution commercial satellite when it launches in 2014.
Under the second contract, MDA will support the systems that process information from DigitalGlobe’s constellation to generate image products.
