Canada’s big space company MDA has been really busy in the last year, what with receiving contracts to begin work on the future Canadarm3 robotic arm and to assist Telesat with critical technology related to the Lightspeed constellation of satellites.
Now we can add an initial public offering (IPO) prospectus to its list of projects.
On March 22, MDA announced that it had filed paperwork for an IPO, obtaining a receipt for a preliminary prospectus with the securities regulatory authorities in all Canadian provinces and territories.
Gross proceeds of the offering are expected to be $500 million, with more details — like the number of common shares to be sold and price per share — being hammered out.
“Completion of the offering is subject to the receipt of customary approvals, including regulatory approvals,” MDA said in a statement. The offering is being made through a syndicate of underwriters led by BMO Capital Markets and including numerous other stakeholders.
MDA has been through other company structure changes since it was founded in Canada in 1969. In December 2019, Toronto-based investment firm Northern Private Capital — which includes investors such as former Blackberry co-CEO Jim Balsillie — bought all MDA assets from Colorado-based Maxar Technologies Inc.
Dallas Kasaboski, principal analyst at Northern Sky Research who follows MDA, said an IPO is a common way for a company to seek capital infusion for large projects, although MDA’s purpose may be different.
“They do have a number of projects they are working on and that they are trying to move forward,” he said in an interview. “Any company in this business, they have debt and normally … their new investments and revenues kind of keep that debt management in check. The aim is to improve the debt load over time.”
MDA, as an “established company with decades of experience,” has a lot of customer trust internationally and remains one of the big space players in Canada, he noted. “This IPO is a public stance that this is a direction we’re taking, and we’re a solid business with many projects,” he said. “It’s not just about financial stability of the company, but the perceptual stability of the company, which will help in its negotiations.”
Each of the company’s major projects has a lot of business potential behind it, Kasaboski said. Canadarm3 is the key contribution by Canada to NASA’s lunar Artemis program, continuing a decades-long tradition of supplying robotics to NASA to secure experiment space and astronaut opportunities on NASA flight. In December, Canada announced it will fly an astronaut on the Artemis II round-the-Moon mission.
The Artemis II mission does not have a set date yet, as the new Joe Biden administration hasn’t yet committed to the Trump administration’s self-imposed deadline of 2024 to put humans on the Moon with Artemis III. But Biden has pledged to continue with the Artemis program, giving Canada and MDA confidence in continuing to build out Canadarm3 to support the NASA Gateway lunar space station.
MDA’s traditional strength in Earth observation plays into a US $3.5 billion (CAN $4.4 billion) market worldwide, Kasaboski said. Following on from its successful RADARSAT, RADARSAT-2 and RADARSAT Constellation missions, MDA announced last month that it plans a continuity mission for RADARSAT-2, which is working well past its design lifetime.
In February, MDA stated it would rely on its “multi-mission Earth observation ground stations as well as advances in artificial intelligence techniques, including machine learning and deep learning, to manage large volumes of data across multiple sensor platforms and enhance our data analytics capabilities.”
Lightspeed is another opportunity for MDA, as it hooks into the worldwide trend of providing telecommunications by satellite constellation. Having a network of satellites serving remote communities is something that companies around the world are doing, most famously SpaceX. Lightspeed will serve remote communities and northern communities, allowing MDA to continue to provide information to isolated groups of people.
Kasaboski said between these projects and MDA’s long-standing reputation of excellence in the space community, they do seem well-positioned to get an IPO — although final approvals are still pending and will be for some time.
“They do have a lot of what this market looks for, with manufacturing technology and being significant players in the market,” he said. “It comes down to, can they cross the Ts and dot the Is for the IPO?
“If there are any changing pressures or strategic directions that have to be taken into consideration for an IPO, which doesn’t appear to be the case,” he continued. “It will be public perception that is important. It’s about turning their revenues into significant research and development, or landing contracts and projects.”
This biweekly column by Canadian science and space journalist Elizabeth Howell focuses on a trending news topic in Canadian astronomy and space.