WASHINGTON — Lockheed Martin will acquire the satellite technology assets of Vector by default after a bankruptcy court received no qualified bids by a deadline last week.
In a Feb. 24 filing in the United States Bankruptcy Court for the District of Delaware, lawyers overseeing the bankruptcy proceedings for Vector said that they received no qualifying bids for the company’s GalacticSky software-defined spacecraft technology by a Feb. 21 deadline.
As a result, Lockheed Martin, which provided debtor-in-possession financing when Vector filed for Chapter 11 bankruptcy in December, will obtain the assets with a “stalking horse” bid of $4.25 million, according to the terms of a Jan. 24 filing. That deal will be finalized at a Feb. 28 court hearing.
The GalacticSky technology was previously a source of contention between the two companies. After Lockheed Martin announced its SmartSat software-defined satellite technology in March 2019, Vector filed suit against Lockheed, alleging patent infringement. Vector withdrew the suit in July, citing ongoing negotiations with Lockheed Martin.
At least one company had expressed an interest in bidding on the GalacticSky assets. NewSpace Networks, a startup founded by several former Vector employees, announced plans Feb. 11 to raise $200 million to develop related technology “through a combination of acquisition, investment and internal product development,” according to a company statement.
A company source said that they sought an extension for the Feb. 21 bid deadline so that investors could do more due diligence on the GalacticSky assets, but that the court declined that request. The company hopes to be able to work with Lockheed on use of that “smart satellite” technology while exploring other applications.
Lockheed has not disclosed its plans for the GalacticSky technology. The company has been working on its own software-defined satellite technology, including flying a payload called Pony Express 1 that tested advanced satellite computing and communications technology on an experimental cubesat launched in December.
The court filing said nothing about any bids for Vector’s other assets, including its small launch vehicle technology that was its best-known business. Lawyers said in the same Jan. 24 filing about the GalacticSky sale that it would also solicit bids for those assets, with a minimum bid of $3 million. Should it get no bids, they would “pursue a separate marketing and sale process” for those assets after completing the GalacticSky sale.
The sale will effectively bring to an end Vector, a company that had raised about $100 million to develop a small launch vehicle and the GalacticSky technology. In August, the company suspended operations and laid off nearly all of its more than 150 employees after one of its major investors, Sequoia, withdrew support for the company because of concerns about how the company was managed. That came as Vector was working on a new funding round, and Sequoia’s decision had a domino effect, causing other investors to back out. The company filed for Chapter 11 bankruptcy Dec. 13.