Karman Space & Defense has acquired Utah-based Industrial Solid Propulsion (ISP), a specialist in military-focused technologies, for a purchase price of up to $60 million.
ISP products are used in the rapidly growing drone, drone intercept and rocket system sectors to keep the aircraft flying at top speed.
Huntington Beach-based Karman Space, which makes components for military and aerospace systems, started trading on the New York Stock Exchange on Feb. 13 and has become one of the fastest-growing defense companies in Southern California (NYSE: KRMN).
The company’s shares are up more than 60% since its listing and were trading at $47.28 apiece with a market cap of $6.3 billion as of July 9.
“We have been working collaboratively with ISP on a number of exciting opportunities for many months and believe that ISP is a natural, strategic fit within the Karman portfolio,” said Tony Koblinski, Karman Space CEO.
“ISP’s proprietary portfolio of propellant formulations and unique manufacturing capabilities furthers Karman’s mission of leveraging advanced technologies.”
730K-Sq.-Ft. of Space
Karman had approximately 730,000 square feet of design, engineering and manufacturing space spread out in eight locations, including Huntington Beach and Brea as of February, with 1,100 employees.
Karman says it specializes in “the rapid design, development and production of critical, next-generation system solutions for launch vehicle, satellite, spacecraft, missile defense, hypersonic and UAS customers.” UAS stands for Unmanned Aircraft System. It is generally referred to as a drone and the equipment needed to operate the airborne vehicle.
The company produced first-quarter revenue of $100.1 million, up 21% year over year, while the net loss was $4.8 million due to one-time expenses related to the public listing.
The acquisition, announced at the end of May, consisted of $50 million in cash, approximately $5 million in Karman common shares and $5 million in potential earnout payments. It was financed with an increased Term Loan B.
Karman, officially called Karman Holdings Inc., said ISP will add to revenue growth and other key metrics.
Strategic Defense Initiative
The ISP products are integrated into a whole array of Department of Defense projects.
They include Strategic Defense Initiative, LEAP Program, Pegasus, SpaceShipOne & SpaceShipTwo, Super Loki and Viper 3A.