Karman Missile & Space Systems acquired Systima Technologies as part of Karman's push into the markets for space and hypersonic system infrastructure.
Karman, headquartered in Los Angeles, was created just in the past year with backing from Trive Capital, a Dallas-based private equity firm. In addition to Systima, Karman's business divisions include AMRO, AAE Aerospace, Aerospace Engineering Corp. and TMX Engineering.
Financial terms of the transaction were not disclosed.
Washington-based Systima currently has about 230 employees — and last year it purchased the Harbour Pointe Tech Center in Mukilteo to serve as its headquarters, reportedly at a price of $46.75 million. In the wake of the acquisition, Systima's leadership team will continue as equity holders and senior leaders of Karman.
The 21-year-old venture, founded by President Tom Prenzlow, specializes in integrating energetic and mechanical systems into the structural design of mission-critical space and hypersonic systems. One of its fastest-growing product lines is the fabrication of high-performance composite structures that use high-temperature materials for missile and launch platforms
Systima's projects include the development of pyrotechnically actuated hatch mechanisms for NASA's Orion deep-space crew capsule, fabrication of a ring-shaped separation joint system for NASA's heavy-lift Space Launch System rocket, and work on hypersonic flight and missile systems for the Defense Department.Those projects mesh well with Karman's business plans.
"We have been watching the Karman business come together over the past year and believe with conviction that the strategic rationale of investing in the space, missile and hypersonic supply chains is absolutely critical," Prenzlow said in a news release. "The vast set of differentiated capabilities, capacity, talented team and incredible complementary fit of Systima with Karman gave us confidence that this was the right home for Systima and its employees."
Karman CEO Tony Koblinski said the acquisition was "another big milestone."
"Systima's robust engineering capabilities allow Karman to work collaboratively with our customers in an earlier stage of a platform's development to identify the ways that Karman can add value," he said.
David Stinnett, a partner at Trive Capital, said Karman "can now address highly engineered content from tip to tail of a rocket."
This article originally appeared on GeekWire.
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In the decade after the Twin Towers fell on Sept. 11, 2001 and the U.S. invaded Afghanistan, military spending skyrocketed, at one point eating up 20% of government spending.
Although it has since fallen, its legacy can still be felt in Southern California where the military drone was born.
Some of the nation's largest military contractors – Northrop Grumman, Boeing, Lockheed, Raytheon and Aerojet Rocketdyne – all have a large presence in Los Angeles County.
In fiscal year 2020, the United States spent $714 billion on national defense, according to the U.S. Government Accountability Office, a figure that registered as over 10% of total federal spending, according to an analysis by the Peter G. Peterson Foundation.
Many of those dollars poured into Southern California where the defense and aerospace industry have a strong hold. The companies have secured hundreds of millions in military contracts to provide missiles, drones and other technologies to help the U.S. military fight terrorism.
L.A. County has more than 50,000 employed in the aerospace and defense industry, according to the Los Angeles County Economic Development Corporation.
Here are six ways companies in Southern California have benefited from the surge in defense spending:
1. Lockheed Martin acquired El Segundo-based Aerojet Rocketdyne
Aerospace giant Lockheed Martin, which was headquartered in Burbank for decades before moving to Maryland, reached an acquisition deal worth $4.4 billion in December for El Segundo-based Aerojet Rocketdyne. The Federal Trade Commission and the Department of Justice have yet to sign off on the deal.
Aerojet Rocketdyne, known for developing and manufacturing rocket motors for missiles like the Tomahawk, Javelin, Patriot and Stinger, generated $2.1 billion in sales in 2020.
2. Lockheed's Palmdale built NASA's supersonic X-plane
In 2018, Lockheed secured a $247.5 million contract to build NASA a supersonic X-plane, which is being built at Lockheed's Palmdale facility Skunk Works. In 2020, the Palmdale outpost was awarded a $50 million contract from the U.S. Air Force to upgrade the Dragon Lady, a single-jet engine, high altitude reconnaissance aircraft.
Lockheed, the world's largest defense contractor, had net sales in 2020 of $65.4 billion.
3. Part of Northrop Grumman remains in L.A. County
Northrop Grumman's worldwide headquarters were in Los Angeles until it moved in 2010 to Virginia to be closer to its military customers, but its Aeronautics Systems division is headquartered in Palmdale.
One of the world's largest weapons manufacturers and military technology providers, it brought in $36.8 billion in revenue in 2020 up from $30.1 billion two years before.
From 2000 to 2001, sales increased 78% to $13.6 billion in 2001 when it acquired three companies.
4. Raytheon expands its El Segundo campus
Aerospace giant Raytheon Technologies was formed in 2020 after a merger of United Technologies and Raytheon Co. In July, it secured a $320 million contract for Stinger missile production for the U.S. Army. In 2021, it expects between $63.4 billion to $65.4 billion in sales.
Raytheon's 16-building El Segundo campus, which employs about 6,000 people, develops products that include radar systems, sensors and electronic warfare technologies. Last summer it planned to hire more than 300 workers.
5. Military drones were born in Southern California post-9/11
Simi Valley-based AeroVironment was the beneficiary of contracts to supply the devices to the military and grew into a publicly traded defense contractor and is now one of the world's largest drone manufacturers.
In 2021, AeroVironment expects to generate between $390 million and $410 million in revenue.
The Defense Department will spend about $7.5 billion in 2021 for a variety of robotic platforms and related technologies, including drones.
6. Defense stocks have also surged since 2001
The Intercept found that if you purchased $10,000 of stock before the U.S. invaded Afghanistan divided among top defense contractors, Boeing, Raytheon, Lockheed Martin, Northrop Grumman, and General Dynamics, it would be worth $97,295, outperforming the stock market overall by 58%.
Northrop Grumman's stock alone jumped 1,196.14%.
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It looks like Rocket Lab will be lifting off again very soon.
The first of three back-to-back launches is expected to take place at an unspecified date later this month as part of a multi-launch agreement between the Long Beach-based space systems company and BlackSky, a global monitoring company with offices in Herndon, Virginia, and Seattle, Washington.
"Love at First Insight," as the first launch has been named, will be taking off from Rocket Lab's Launch Complex 1 on the Mahia Peninsula in New Zealand.
If the final of the three launches takes place in September as planned, it will mark Rocket Lab's fastest launch cadence to date, surpassing a series of three launches from late October to mid-December 2020.
Rocket Lab will use its 59-foot tall Electron rocket for the launches, the first of which will mark the Electron rocket's 22nd launch. Two of BlackSky's Gen-2 satellites will be carried on each launch, adding a total of six new satellites to BlackSky's growing satellite constellation.
With Rocket Lab's help, BlackSky plans to have a total of 14 satellites in their constellation by the end of the year. Currently, seven out of the 30 total planned satellites have been deployed. The constellation will aid BlackSky in providing satellite images of the Earth's surface for its commercial and U.S. military clients.
"This cadence of rapid launches demonstrates the accelerated pace at which we are able to expand our constellation and reinforces our commitment to delivering global real-time data and intelligence," BlackSky CEO Brian O'Toole said in a statement. "With these additional satellites in our constellation, we can increase revisit rates and rapidly add capacity to ensure our customers will be the first-to-know about what is most important to them."
Launch services provider Spaceflight arranged the agreement between the two aerospace companies, which was signed earlier this year. The first launch under the agreement took place this past May, but a malfunction caused the Electron to fail to go into orbit, and the satellites were lost.
The news comes just days after Rocket Lab announced its first mission to the moon, which is slated to launch in the fourth quarter of the year as part of NASA's Artemis program.
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