Terran Orbital Corporation ( LLAP ) shares are diving today after the company disclosed a deal under which Lockheed Martin Corporation ( LMT ) will acquire the company for an enterprise value of around $450 million.

As per the deal, Lockheed Martin ( LMT ) will acquire Terran Orbital ( LLAP ) for $0.25 per share in cash and retire its existing debt.

The transaction also includes establishing a new $30 million working capital facility by Lockheed Martin ( LMT ) and other current Terran Orbital ( LLAP ) creditors, which has been set up as of the signing.

The transaction is expected to close in the fourth quarter of 2024, pending customary closing conditions.

Lockheed Martin ( LMT ) uses Terran Orbital’s satellites for its work, most notably with the Space Development Agency’s Transport and Tracking Layer programs and in several self-funded technology demonstrations.

After the closing, Terran Orbital ( LLAP ) will continue to operate as a commercial merchant supplier to the industry. As of today, Lockheed Martin ( LMT ) is Terran Orbital’s largest customer.

Notably, Terran Orbital ( LLAP ) joined Lockheed Martin Ventures in 2017 with an initial investment, followed by two more investments in 2020 and 2022. This acquisition is the first from the LM Ventures portfolio since the fund was founded in 2007.

In May, Lockheed Martin ( LMT ) withdrew its buyout proposal for Terran Orbital ( LLAP ).

For the second quarter ended June, Terran Orbital ( LLAP ) reported a net loss of $35.4 million, which widened from the year-ago loss of $28.1 million.

As of June-end, Lockheed Martin’s cash and cash equivalent stood at $2.5 billion.

Price Action: LLAP shares are down 40.6% at $0.2376 at the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image via Shutterstock

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