Kongsberg to acquire majority stake in NanoAvionics

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WASHINGTON — Norwegian company Kongsberg Defence & Aerospace will acquire a majority stake in NanoAvionics in a deal that values the smallsat manufacturer at 65 million euros ($67 million).

Under the terms of the agreement announced July 5, Kongsberg will acquire 77% of NanoAvionics, with the management of NanoAvionics holding the other 23%. AST SpaceMobile, which acquired a 51% stake in NanoAvionics in 2018, will sell its shares.

“The agreement to acquire NanoAvionics represents a game changer for Kongsberg’s space ambitions. By acquiring NanoAvionics, Kongsberg expands its portfolio to also have products and technology for designing and manufacturing small satellites,” said Geir Håøy, chief executive of Kongsberg, in a statement. “We have clear ambitions to grow further and with this acquisition we are taking the next step both for us and for Norwegian space industry.”

The deal comes a month and a half after Kongsberg ordered three smallsats from NanoAvionics. The satellites, scheduled for launch in 2024, will be used to track ships using both Automatic Identification System (AIS) transponders and radar emissions from vessels not broadcasting AIS signals. The three satellites could form the core of a larger constellation for global coverage, a Kongsberg manager said when the deal was announced.

Those three satellites will use NanoAvionics’ MP42 satellite bus designed for satellites weighing 50 kilograms or more, a departure from the company’s earlier work primarily on cubesat-class spacecraft. The first MP42 satellite, a technology demonstrator with some hosted payloads, launched on SpaceX’s Transporter-4 rideshare mission in April.

NanoAvionics, based in Lithuania with a U.S. subsidiary, has built up a diverse set of customers for its smallsats. In addition to the Kongsberg contract, it announced in recent months contracts to provide satellite buses or complete satellites for startups such as Gama, which is developing solar sail technology, and Turion Space, which has plans for satellite servicing and debris removal. It also announced deals to provide satellites for universities and research institutes in Australia and New Zealand.

Kongsberg produces spacecraft subsystems and is best known in the space industry for Kongsberg Satellite Services, or KSAT, a leading ground station network operator.

“Joining forces with Kongsberg, one of the most respected names in the defense, maritime and space domain, further strengthens and broadens our position in the NewSpace sector and provides us access to new markets,” said Vytenis J. Buzas, founder and chief executive of NanoAvionics, in a statement. “It is the right timing and a perfect match for our companies to consolidate our expertise and create a world class space company which will be a leading prime contractor for small satellite missions.”

AST SpaceMobile said in a filing with the Securities and Exchange Commission (SEC) that it expects to receive 27 million euros for the shares in NanoAvionics it is selling. InMotion Holdings, LLC, a company owned by AST SpaceMobile’s chief executive, Abel Avellan, will receive an additional 7.7 million euros for options it has to acquire NanoAvionics shares.

AST SpaceMobile acquired a controlling stake in NanoAvionics in 2018 with the intent of building up its satellite manufacturing capabilities. AST has since created its own satellite factory in Midland, Texas, for building the spacecraft it’s planning for a constellation to provide satellite telephony services.

“The planned sale of our investment in NanoAvionics will provide additional liquidity and allow AST SpaceMobile to focus on its core, direct-to-cell phone technology and the launch of the first commercial satellites,” Scott Wisniewski, chief strategy officer at AST SpaceMobile, said in a statement. “Together with existing balance sheet cash, proceeds from the sale and the recently announced $75 million committed equity facility, we have access to significant liquidity to execute our business plan.”

AST SpaceMobile reported having $255.1 million in cash, cash equivalents and restricted cash on hand at the end of the first quarter of 2022. It announced May 6 an agreement with B. Riley Principal Capital to sell up to $75 million in AST stock over two years to provide additional funding.

Kongsberg and NanoAvionics said the deal will close after completion of customary conditions, including regulatory reviews, but did not estimate when that would take place. AST SpaceMobile said in its SEC filing it expects the share sale to close in the third quarter.