Redwire to go public through a SPAC merger

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Updated 10:55 a.m. Eastern with comments from investor call.

WASHINGTON — Redwire, a firm that has acquired several space technology companies in the last year, announced March 25 that it will go public by merging with a special-purpose acquisition corporation (SPAC).

Redwire said it will merge with Genesis Park Acquisition Corp., a SPAC that went public in November 2020. The merger will provide Redwire with $170 million in capital, valuing the company at $615 million. The companies expect the deal to close by the end of the second quarter of this year, at which point Redwire will be publicly traded on the New York Stock Exchange.

AE Industrial Partners, a private equity firm, created Redwire in June 2020 by combining two space technology companies, Adcole Space and Deep Space Systems, it had acquired. Redwire has since gone on to acquire several more companies, including in-space manufacturing company Made In Space, structures companies LoadPath and Roccor, engineering firm Oakman Aerospace and, most recently, Deployable Space Systems, a developer of spacecraft structures and solar arrays.

Those acquisitions have turned Redwire into a major supplier for the space industry, fueling its growth. “Many people believe that the next decade of space is a new gold rush. In that context, Redwire is providing the highly specialized picks and shovels required for the space industry,” Peter Cannito, chairman and chief executive of Redwire, said in a March 25 call with investors about the deal.

That business has made Redwire unique among space companies going public through SPACs in that it has both revenues and profits. The company reported $119 million in revenue in 2020, with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $13 million. The company projects revenue to grow to $163 million in 2021, with adjusted EBITDA of $20 million. By 2025, the company expects to grow to $1.4 billion in revenue with an adjusted EBITDA of $250 million.

“Redwire has the unique combination of profitability and breakout organic growth, which sets us apart from SPAC peers in space and additive manufacturing,” said Jonathan Baliff, president and chief financial officer of Genesis Park Acquisition Corporation, on the call.

Andrew Rush, president and chief operating officer of Redwire, noted in the call the company has won more than $70 million in new business in recent months, such as a solar sail for a NASA heliophysics mission, a robotic arm for the Vigoride tug being developed by Momentus and avionics for Firefly Aerospace’s lunar lander. “These wins underscore the confidence that we have in our financial projections,” he said.

Redwire said in an investor presentation that the cash it raises from the deal will be “dry powder for strategic investments and continued pursuit of Redwire’s proprietary M&A [merger and acquisition] pipeline.”

“We also believe there is significant opportunity to accelerate growth through strategic combinations in the fragmented space landscape,” Paul Hobby, chief executive of Genesis Park, said in the statement announcing the deal. “Redwire has established itself as a first-mover consolidator and an acquirer of choice, and we believe its position will be further improved as a public company.”

Redwire will also pursue business opportunities in five “strategic focus areas,” including on-orbit servicing and assembly, low Earth orbit commercialization, digital engineering of spacecraft, space domain awareness and advanced sensors and components. Those areas leverage capabilities from the companies it has acquired, such as Made In Space for on-orbit assembly and Oakman Aerospace for digital spacecraft engineering.

“We are well on our way to achieving our five-year projection of $1.4 billion in revenue by 2025 by organic means alone,” Cannito said. “For additional upside, this transaction is with the opportunity to significantly enhance this growth by continuing our proven track record of strategic acquisitions as well as accelerated research and development and additional capex.”

Redwire joins a wave of companies in the space sector that have announced plans to go public through SPACs. Those have included in the last six months in-space transportation company Momentus, space communications company AST SpaceMobile, small launch vehicle companies Astra and Rocket Lab, imaging company Black Sky and satellite services company Spire. None of those deals have yet closed, but shareholders in New Providence Acquisition Corp., the SPAC that announced in December an agreement with AST SpaceMobile, are scheduled to vote to approve the merger April 1.