Surrey Satellite Technology Limited (SSTL) is considering inviting new shareholders or being an acquirer or acquired entity in the next few years.
As SSTL’s major shareholder the University of Surrey looks to reduce its stake in the next few years, new…
Surrey Satellite Technology Limited (SSTL) is considering inviting new shareholders or being an acquirer or acquired entity in the next few years.
As SSTL’s major shareholder the University of Surrey looks to reduce its stake in the next few years, new shareholders are likely to come onboard. SSTL CEO Sir Martin Sweeting said: “It is possible that we might invite interest in our shareholding in the next year or so if we see the right types of partners approach us. The University of Surrey does not want to exit completely, but it is not appropriate for it to have such a large shareholding.ᦙ3;?
“The University of Surrey has a close synergy with the company due to the research carried out there so it will remain a shareholder, but it is likely to take a minority shareholding in due course,ᦙ3;? he continued.
SSTL is interested in having shareholders that have a good strategic alliance with the company. Sweeting said SpaceX, which took a 10% stake in September 2005, was a good example of a company that had this. “It was a pretty obvious marriage – we need low cost launches and they need low cost satellites.Elon Musk [SpaceX’s CEO and founder] has been able to give SSTL commercial insight into the US market,ᦙ3;? said Sweeting. “It has enabled us to think about how to address the US market from that side of the pond.ᦙ3;?
As well as changing its shareholding, SSTL has also in the past been viewed as a good acquisition target. Sweeting is currently not in discussions with any larger companies about this, but has not ruled it out: “We would be interested in being acquired, but we want to maintain a degree of independence.ᦙ3;?
SSTL fuels inorganic growth
SSTL purchased last month the space imager and scientific instrument activities of the Sira Group, which was in administration.
The company, which used Sira’s imaging camera on the Beijing-1 microsatellite, will use its latest acquisition to deliver satellites with more speed, as well as supplying space-imaging systems. SSTL self-funded the acquisition and the amount paid was undisclosed. Legal advisers Stephens & Bolton were used to close the deal.
Sweeting admits the company will look at raising money in the next couple of years to raise money for future acquisitions. Possible acquisition targets include companies that are either similar to SSTL or that can give the organisation added value service.
SSTL has grown 25% in the last five years. SSTL employs 200 staff and builds low-cost and lightweight (between 6kgs and 1000kgs satellites) satellites.
Launch momentum gathering
SSTL is completing the CFESat research microsatellite for the Los Alamos Laboratory in the USA for launch. A further five microsatellites are under construction for the German RapidEye commercial earth observation constellation that are to be launched mid-2007.
In addition, the manufacturer is chasing after contracts to build geostationary satellites, following the success of test satellite GIOVE-A built for the ESA Galileo project, which was launched last year. SSTL’s geostationary satellites contain the same technology platform as the Galileo satellite, but use existing payload technology.
This is a new market for SSTL, which in the last five years has been focused on manufacturing earth observation satellites. Sweeting points out that the primary market for these satellites is the government sector. The geostationary satellites attract both government and commercial markets.
Disaster Monitoring Constellation (DMC) satellites are also a market SSTL plans to expand in. Five SSTL DMC satellites have already been launched.
SSTL plans to bid for the next tender to build satellites for Galileo. Sweeting is confident with its current track record of meeting deadlines and offering cheaper satellites than its competitors means it has a good chance of clenching the deal. SSTL’s biggest markets are the USA, China, Japan and Europe respectively.