Hisdesat Takes Stake in Com Dev’s AIS Venture

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PRAGUE, Czech Republic — Hisdesat of Spain, which sells commercial X-band satellite capacity to military and civil government agencies, has taken a 27 percent equity stake in exactEarth Ltd., a division of Com Dev of Canada that is developing a global space-based maritime vessel-tracking system, Hisdesat and Com Dev announced Sept. 30.

The all-cash investment of 15 million Canadian dollars ($14.6 million) gives exactEarth an implied value of 55.5 million Canadian dollars. The company, in which Cambridge, Ontario-based Com Dev retains a 73 percent stake, has been slowed by delays in launches of two satellites for its service, which began trial operations in August, and is expected to report no more than 2 million Canadian dollars in sales for its current fiscal year, which ends Oct. 31, according to Com Dev estimates.

Com Dev said it already has invested 24 million Canadian dollars of the 35 million Canadian dollars it has set aside for exactEarth.

The Hisdesat investment is the second trans-Atlantic tie-up on space-based Automatic Identification Systems (AIS) in less than a week. On Sept. 28, Orbcomm of Fort Lee, N.J., announced it had contracted with OHB Technology of Germany and OHB’s LuxSpace subsidiary of Luxembourg to provide two small satellites for Orbcomm’s AIS service, which is expected to accelerate with the launch, set for 2011, of Orbcomm’s 18 AIS-equipped machine-to-machine messaging satellites.

The 18-nation European Space Agency (ESA) is positioning itself in the middle of the emerging AIS business with a program that will evaluate the Com Dev and Orbcomm technologies against requirements that ESA is assembling with the European Maritime Safety Agency (EMSA).

In an indication of how promising some European governments view space-based AIS, ESA in less than a year has struck a deal with the European maritime-safety regulator, crafted an AIS preparatory development program and raised some 12.5 million euros ($17 million) to start work, according to Amnon Ginati, head of ESA’s integrated and telecommunications-related department.

In a Sept. 30 interview here during the 61st International Astronautical Congress, Ginati said ESA is not seeking to create a government-backed AIS service to compete with Com Dev or Orbcomm. Instead, the agency will refine the requirements of users, particularly those of government agencies including coastal surveillance authorities, and determine whether Orbcomm and Com Dev are able to meet those needs.

Of particular interest will be ESA’s conclusions about whether the U.S. or the Canadian company, or both, can generate an orderly flow of usable ship-identification data from the radio-frequency chaos of hundreds of ship-based AIS beacons, all broadcasting in the same frequency, entering into each satellite’s moving coverage area.

Ginati said Luxembourg and France are the two biggest investors in the ESA program, under which the agency expects to solicit bids on two 18-month AIS system evaluation contracts late this year. Two consortia are likely to be selected for the work by next March, with each contract valued at around 3.5 million euros. The results will be presented at a conference of ESA government ministers for review of a full-scale AIS program. Canada, which is an associate member of ESA, is also participating in the program.

“We certainly do not want to re-invent the wheel or duplicate what is being done” by Com Dev or Orbcomm, Ginati said. “What we want to do, with our ESA and European Commission partners, is validate what the market is offering. We will invite Com Dev and Orbcomm to give us, on a confidential basis, results of their system tests, and we will compare their advertised performance with the actual performance. So they will have to show us what they have.”

Ginati said it is possible that ESA and the European Commission will agree to fund their own space-based AIS demonstration mission. ESA is already comparing two AIS technologies on its section of the international space station, one developed in Norway and the other by LuxSpace.

Madrid-based Hisdesat markets X-band capacity on two in-orbit satellites as part of the Xtar LLC company it co-owns with Loral Space and Communications of New York. Com Dev said the Spanish investment in exactEarth will be used by the AIS subsidiary for its “ongoing business operations and the deployment of additional space and ground infrastructure.”

Two small AIS satellite payloads built for exactEarth are scheduled for launch in the coming months.

In a Sept. 30 statement, Hisdesat Chief Executive Roberto Lopez Fernandez said his company views its exactEarth investment as a “long-term commitment to support our business interests in global surveillance. We have spent considerable time evaluating the exactEarth AIS technology and the company’s business plan … [and we] are pleased to be strategically aligned with Com Dev in capitalizing on the space-based maritime surveillance opportunity this technology represents.”

Hisdesat is 43 percent owned by Spanish satellite fleet operator Hispasat, 30 percent by the Spanish government, 15 percent by EADS Casa Espacio, 7 percent by electronics and information technology company Indra, and 5 percent by Spanish aerospace engineering company Sener.

Peter Mabson, chief executive of exactEarth, said the company had been looking for a strategic investor that could bring both cash and complementary business experience to the table. In an Oct. 1 interview, Mabson said Hispasat’s involvement now satisfies that requirement and exactEarth is not seeking further outside equity. He said Hisdesat’s experience in dealing with allied navies will be a key asset for exactEarth. Another complementary asset could be an exactEarth AIS terminal placed on the Spanish Paz radar Earth observation satellite, now in development for the Spanish government. No decision on this been made, he said.

Mabson said Canada and exactEarth are aware of ESA’s AIS studies and are supportive of the idea that the agency will verify the performance of proposed commercial services on behalf of its member governments. He said exactEarth will cooperate with ESA in furnishing technical data to validate the service’s performance and hoped that ESA would not decide to launch a system that would duplicate what is available commercially.

Mabson said exactEarth “has taken great care” to select partners in Europe — Surrey Satellite Technology Ltd. of Britain to build a satellite to be launched in 2011; Kongsberg Satellite Services, which will handle downlinks of exactEarth data; and now Hisdesat — and that this should reduce ESA’s desire to launch its own satellite constellation, as the agency originally was considering.