IPO Watch: York Space Systems builds gigafactory for satellites

2020 and early 2021 have generated a lot of enthusiasm for space investors. After decades of waiting, private space companies like Rocket Lab, Momentus, and Astra (but not SpaceX, unfortunately) follow in Virgin Galactic Holdings(NYSE: SPCE) the steps and the announcement of the plans become public via a Special Purpose Acquisition Company (SPAC).

And now investors may be able to look forward to another IPO.

Chalkboard drawing of an IPO and a soaring rocket

Image source: Getty Images.

York Space Systems overview

Founded in 2012, privately held York Space Systems is a manufacturer of small satellite buses – satellite chassis that can be tailored to meet various space missions that a customer might want them to perform. It launched its first satellite on a Rocket Lab Electron rocket in 2019 – a US Army “Harbinger” satellite based on the York S-Class design.

The S-Class is York’s main product, a 24-inch by 24-inch by 38-inch stabilized 3-axis spacecraft designed for mass manufacturing and intended for satellite constellations. Using the S-Class, a customer can ignore the cost of developing a satellite on its own, and instead buy a set of York Space seats and assemble them into a constellation to do things like monitor the weather on Earth, take pictures. photos from orbit or set up a satellite communications network.

In August 2020, the US Space Development Agency (soon to be absorbed into the Space Force) hired York to build 10 communications satellites for Transport layer slice 0 of its new missile defense system, for $ 94 million. SpaceX, L3Harris, and Lockheed Martin are also building blocks of this constellation – but York seems to have a cost advantage. As SpaceNews pointed out last year, York is building its satellites for the Pentagon for about half the cost charged by Lockheed.

And in April, York announced it would start building a newer, more robust satellite bus in 2022 – the LX-Class, twice the size of the S-Class, with triple power output and four times the capacity of battery.

A gigafactory for space satellites

As more and more space companies are launching small satellites, York Space is developing its own business to give them something to start. To support production of the new LX-Class and expand production of the S-Class, York has announced it will add a 100,000-square-foot “mega-center” to its headquarters in Denver, Colorado.

York says it needs the expanded facility to achieve the “high-throughput production” needed to meet “the demand we are currently seeing in the commercial and government markets.” (According to the company, around 65% of its orders come from government customers and 35% from the private sector.)

With a production capacity of 1,000 satellites per year today, Dirk Wallinger, CEO of York Space, told CNBC, the new satellite gigafactory will both increase production volume and speed up the time needed to build each satellite. individual from three months to only 30 days. York can even help clients identify the right ship and rocket launcher, helping “ideas … go from paper to orbit … in months.”

Is an IPO in progress?

As York launches new products and prepares to massively expand production, two questions naturally arise. First, why all this expansion? The answer: Wallinger replies that he sees “a ton of demand”.

And the second question, from investors: when will York go public?

To this, Wallinger responds that the company is “not quite” ready to go public at the moment, but that an IPO is “a possibility” in the future. Given the implosion of SPAC-sponsored IPOs we’ve seen over the past few months, such reluctance is understandable – York partner Rocket Lab saw its pre-IPO action, (Vector acquisition (NASDAQ: VACQ), down 28% since the start of March, after all. Momentus SPAC, Acquisition of stable routes (NASDAQ: SRAC), is 38%.

Given the cold shoulder investors have turned to PSPCs recently, it is possible that York may choose to take a more traditional route to the IPO. Regardless of how the decision to go public is ultimately made, you can be sure we’ll be monitoring – and letting you know what the financials looks like as soon as we know.

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Rich smith owns shares of Vector Acquisition Corporation. The Motley Fool owns shares and recommends Virgin Galactic Holdings Inc. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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