Univ. of Surrey To Sell SSTL Stake

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  Space News Business

Univ. of Surrey To Sell SSTL Stake

By PETER B. de SELDING
Space News Staff Writer
posted: 19 December 2007
02:56 pm ET





PARIS — O


ne of the




world’s most successful builders of small satellites, Britain’s Surrey Satellite Technology Ltd. (SSTL), has been put on the auction block by its owner with a sale likely to occur by next spring,




SSTL Managing Director Sir Martin Sweeting confirmed.



In a Nov. 27 interview, Sir Martin said the university will be selling almost all of its 85 percent equity interest in SSTL, but plans to retain a small stake to make it clear that its current relationship with the company will not be severed.

One potential buyer of SSTL said there is concern




that many of the company’s strengths




are tied to its university relations. Among these is access to capital and




low-cost labor in the form of graduate students




for SSTL projects.



“Any buyer will need to be concerned that SSTL, once purchased, will no longer have some of the benefits of this university-industry relationship,” this official said.

Sir Martin denied this. He said SSTL has a contractual agreement with the university regarding intellectual property rights that mirrors similar agreements the company has with its customers. He said he could think of no advantage




SSTL has now that will disappear once its ownership changes hands




.



“The university and we have become aware that for us to grow, we need access to ever greater amounts of capital and the university cannot provide it,” Sir Martin said. “The company has been successful, has grown up and, if you will, it now needs its own flat. But the university-SSTL relationship need not fundamentally change, unless the new owner wants it to change.”

Sweeting
said that while the University of Surrey has debated for several years about whether to sell its SSTL stake, it has now decided the time has come to make the move and




already has received expressions of interest from several prospective buyers.

“Our growth is accelerating, so they would rather do this




sooner rather than later,” Sir Martin said. “We have been approached by quite a number of people.”



SSTL reported revenue




of 26 million British pounds ($53.64




million) for the fiscal year ending July 31, with a net profit of 1.2 million pounds. Sir Martin said that given the company’s current order book, it expects to report revenue




of 46 million pounds and a net profit of 3 million pounds for the current fiscal year.

In part because of its university affiliation and status as a company specializing in research satellites, SSTL has an unusually wide range of past and current customers who have hired the company




to build small, inexpensive satellites, to train local engineers in the art of satellite manufacturing, or both.

SSTL has built 27 satellites since 1981, and its current backlog includes 13 other satellites to be launched by late 2009.

The company’s customer list includes the British, U.S. and French defense forces, the governments of Algeria, Brazil, Chile, China, Nigeria and Pakistan, and more recently, the European Space Agency.

In addition to the University of Surrey’s 85 percent holding, Space Exploration Technologies Corp. of the United States owns 10 percent of SSTL, with SSTL employees holding the remaining 5 percent




.






Sir Martin said it is




unlikely that the university would agree to sell SSTL to a company that planned to swallow it whole, stripping away




its special character and possibly its wide customer base. “I don’t see any point in a company buying SSTL and then turning it into another monster,” Sir Martin said.



While SSTL has focused on making low-cost




satellites weighing anywhere




from 6 kilograms




to around 650 kilograms, the company is developing a new product line, called Geostationary Minisat Platform, intended to serve the commercial telecommunications market.

Two versions – one for direct injection into geostationary orbit, the other for placement into the more conventional geostationary transfer orbit – are being




designed. Versions designed for initial placement into geostationary transfer orbit – where most commercial telecommunications satellites are released by their launch vehicles –




would weigh 2,000 kilograms at launch and deliver




2.5 kilowatts of power to the payload.

With these products, SSTL will be taking another step toward direct competition in the global commercial market. Whether the company’s renowned cost-effectiveness can withstand the sharp decline of the U.S. dollar remains to be seen. Its geostationary platform is not much smaller than commercial products offered by Orbital Sciences Corp. of Dulles, Va., and by OHB System of Bremen, Germany.



Thales
Alenia Space of France and Italy




also is active in building small telecommunications satellites, and several U.S. companies – encouraged by the U.S. Department of Defense – are now entering the small-satellite field.