DigitalGlobe CEO Jeffrey Tarr said investment in replacement satellites for WorldView-1 and 2 would start in 2017, and that the Saudi-built constellation in which DigitalGlobe is a partner would launch in 2019. Credit: Space Foundation

SAN FRANCISCO —  In a move designed to expand its geospatial services business and U.S. government customer base, DigitalGlobe Inc. announced plans Oct. 11 to pay $140 million to acquire The Radiant Group, a geospatial information company based in Chantilly, Virginia.

“We are on the cusp of a number of shifts occurring both in the government market and in the commercial market, with moves toward cloud computing, increasing utilization of machine learning, crowd sourcing and open source software,” said Walter Scott, founder, chief technical officer and executive vice president of Westminster, Colorado-based DigitalGlobe.

By purchasing Radiant, DigitalGlobe adds “hundreds of innovative software developers and analysts with experience in those areas to solve complex geospatial intelligence challenges,” he added.

Increasingly, intelligence agencies faced with a flood of imagery from satellites, drones and other sources are asking contractors to answer their most pressing questions rather than providing raw imagery or data. Radiant’s expertise will help DigitalGlobe “squeeze the most capability out of what they are collecting with their systems on orbit,” said Keith Masback, United States Geospatial Intelligence Foundation chief executive and former director of NGA’s Source Operations Group.

DigitalGlobe captures between 50 to 60 terabytes of imagery daily and has an 80-petabyte image library. Radiant can help DigitalGlobe improve its collections with smart tasking, Scott said. Radiant’s expertise also will improve DigitalGlobe’s ability to use its imagery and data to give its customers “actionable insight,” he added.

“This is part of the natural maturation of the industry,” Masback said. “For any company that has assets on orbit to be sufficiently competitive in an increasingly crowded market space, they are going to have to differentiate themselves by what they are able to provide, not just in terms of pixels but information and answers.”

The Radiant acquisition also brings DigitalGlobe new customers. DigitalGlobe already has strong working relationships with the National Geospatial Intelligence Agency, Defense Intelligence Agency and U.S. Special Operations Command. By acquiring Radiant, DigitalGlobe builds its relationship with the National Reconnaissance Office, said Jeff Tarr, DigitalGlobe president and chief executive.  “With this acquisition, NRO becomes a significant customer for the company,” Tarr said Oct. 11 during a conference call with investors.

At a time when startups are launching small satellites constellations and advertising their ability to provide valuable information and imagery to commercial and government customers, DigitalGlobe’s acquisition of Radiant “may create a little more of a firewall surrounding their relationship with the intelligence community,” said Chris Quilty, president of Quilty Analytics, a research and consulting firm in St. Petersburg, Florida.

Many Radiant executives and employees have extensive defense and intelligence backgrounds, Masback said. Radiant also has more than 80 contracts with U.S. intelligence and special operations agencies, including more than 20 prime contracts, Tarr said during the conference call. That is important because if no contract is in place for a particular product or service, even if it is something a government agency wants to buy, it can take years to establish a new contract, Scott said.

In the deal, which is expected to close by the end of the year, DigitalGlobe plans to use cash on hand and draw on its existing line of credit to pay $140 million for Radiant. DigitalGlobe expects Radiant to report 2016 revenues of about $100 million.

Debra Werner is a correspondent for SpaceNews based in San Francisco. Debra earned a bachelor’s degree in communications from the University of California, Berkeley, and a master’s degree in Journalism from Northwestern University. She...