Investment Perspectives: Redwire Acquires Made In Space

June 24, 2020 • By Sven Eenmaa, Director of Investment and Economic Analysis for the ISS National Lab

Yesterday, Redwire, a recently launched portfolio company of AE Industrial Partners, announced the acquisition of Made In Space, Inc., the leading developer of in-space manufacturing technologies. The strategic investment in Made In Space complements AE Industrial Partners’ acquisitions of Adcole Space and Deep Space Systems earlier this year and subsequent combination of the two companies. Redwire’s goal is to build a new space platform company with advanced and highly competitive capabilities to deliver mission-critical solutions and high reliability components for the next-generation space economy and related programs. Made In Space printed its first parts onboard the International Space Station (ISSInternational Space Station) in 2014, and over the last decade, the company has both built a rich portfolio of capabilities and won significant mandates.

In our view, the announced transaction is a positive indication of investor confidence in the long-term fundamentals of the new space economy opportunities, including increasing recognition of value creation by in-space or in-orbit applications (manufacturing, servicing, and technology and infrastructure development), potentially addressing several end markets and programs complementing as well as reaching well beyond the satellite sector. These in-orbit application opportunities build on and benefit from the recent years’ heavy private-sector investments in new launch vehicles, leading to reductions in costs and growth in access, and strong investments in human spaceflight capabilities with the recent commercial success. We are now seeing tangible progress with space-based infrastructure and habitat models beyond the ISS as well.

Redwire’s multi-sector, multi-application capabilities and resulting benefits to scale should allow the company to favorably impact the economics and catalyze volume growth, and the underlying demand drivers certainly look promising. “To truly realize the full potential for space exploration, innovation must change the economics,” commented Peter Cannito, CEO of Redwire while announcing the acquisition. “Made In Space has been driving these innovations and is now positioned to revolutionize the industry.”

NASA’s long-lasting commitment to private-sector engagement has been essential to the initial seeding and evolution of this ecosystem, and the agency’s forward-looking programs are clearly a significant part of the future demand mix. The defense sector’s heightened focus on the space domain has been broadly discussed over the recent years. While the crowded landscape of planned smallsat constellations has started to rationalize, we are seeing the emergence of market leaders there that are bound to benefit from the growing global demand for broadband data and geospatial information.

From our vantage point at the ISS U.S. National Laboratory, we do see broadening demand, with more than 70% of the payloads launched in fiscal 2019 representing projects from the private sector. We view demand as price-elastic here as well. Encouragingly, we see startups using R&D and technology development onboard the ISS to catalyze their business evolution to the next stages of funding and growth, with the success stories including Made In Space and reaching to companies in the life sciences, communications, agtech, satellite services, and other sectors.