Space Propulsion Business Spun Off From L3Harris in $845 Million Deal, Reborn as Rocketdyne
Deal First Announced in January Closes Seven Months Later, With RS-25 Engine Program Held Back
A space propulsion, power and electronics business once part of L3Harris Technologies has become an independent company under a revived name: Rocketdyne, in a deal valued at $845 million.
“As a standalone company, we now have the agility and focus to better serve our customers, invest in our people and capabilities and pursue new opportunities in the rapidly expanding space industry.”
Kristin Houston, Rocketdyne
AE Industrial Partners, a private investment firm based in Boca Raton, completed its purchase of a majority stake in the units from L3Harris, according to news releases from both companies. L3Harris first announced the agreement on Jan. 5; the deal closed roughly seven months later, on Aug. 4. L3Harris will retain roughly a 40% ownership stake in the new company and will continue as what AE Industrial’s release calls a “strategic partner.” L3Harris’ RS-25 rocket engine operations were excluded from the sale, according to both L3Harris releases. Jefferies LLC served as L3Harris’ exclusive financial advisor on the transaction, according to the January release.
L3Harris Chairman and CEO Christopher Kubasik said in January that the deal “further aligns the L3Harris portfolio” with the priorities of the Department of War. “L3Harris is strongly committed to the Department of War’s vision for a faster, more agile defense industrial base while remaining laser-focused on driving value for our shareholders and customers,” Kubasik said. L3Harris said it expects to use proceeds from the sale to invest in facilities and technology to meet what it described as growing demand.
AE Industrial’s prior space-sector investments include Firefly Aerospace, Redwire Space and York Space Systems, according to the January L3Harris release.
Kristin Houston will serve as chief executive officer of the new company. She previously served as president of the Space Propulsion & Power Systems sector within L3Harris’ Missile Solutions segment, and as president of the Electro Optical Sector within Integrated Mission Systems, according to the AE Industrial release. Before joining L3Harris, she spent more than 16 years at Boeing in engineering and program management roles.
“As a standalone company, we now have the agility and focus to better serve our customers, invest in our people and capabilities and pursue new opportunities in the rapidly expanding space industry,” Houston said. “This milestone would not have been possible without the steadfast support of AE Industrial and the partnership of L3Harris.”
Jon Lusczakoski, a partner at AE Industrial, said the firm intends to help the company “invest in and scale its core businesses, driving the next generation of space mobility, power, and electronics.”
Kirk Konert, managing partner at AE Industrial, said Rocketdyne is “positioned to be a vital pillar in ensuring the world’s space technology needs are met in the present and into the future.”
AE Industrial said it will invest in Rocketdyne’s core capabilities, including upgrading the technology and manufacturing of the RL10 rocket engine, increasing production of in-space propulsion thrusters, and advancing nuclear power and energy solutions for space applications.