Redwire’s Valuation Reaches Orbit

Redwire, a portfolio company of AE Industrial Partners, has agreed to merge with publicly traded special purpose acquisition corporation Genesis Park Acquisition.

AEI formed Redwire in June 2020 to combine Maryland-based Adcole Space with Colorado-based Deep Space Systems, a maker of advanced space components. AEI acquired Adcole Space in March 2020 (then Adcole Maryland Aerospace) from Artemis Capital Partners. Redwire is led by chairman and CEO Peter Cannito.

Adcole is a manufacturer of guidance, navigation, and control components used in low-earth orbit and geosynchronous satellites, and interplanetary spacecraft. The company’s key products include sun sensors (a navigational instrument used by satellites and spacecraft to detect the position of the sun); and star trackers and cameras (used to determine the orientation of a satellite and spacecraft with respect to the stars).

“Space-based capabilities and services are improving lives on Earth every day, and Redwire is an invaluable mission partner, providing technology that has been at the forefront of space infrastructure from the beginning,” said Mr. Cannito. “Today, the influx of private capital, new public sector space initiatives and decreased launch costs are driving tremendous growth in the space industry, which is projected to exceed $2 trillion by 2040.”

In addition to Adcole Space and Deep Space Systems, Redwire’s other acquisitions include the February 2021 buy of Deployable Space Systems, a California-based provider of deployable structures, telescopic booms, and solar arrays used in satellite and space applications; the January 2021 buy of Oakman Aerospace, a Colorado-based provider of spacecraft and satellite design and development services; the December 2020 buy of LoadPath, a New Mexico-based maker of deployable space structures and thermal management components used in launch vehicle and satellite manufacturing; the June 2020 buy of Florida-based Made In Space, a pioneer of in-space manufacturing and assembly technologies including 3-D printers that have flown on the International Space Station; and the October 2020 buy of Colorado-based Roccor, a supplier of deployable booms, structures, antennas, and solar arrays for spacecraft.

Revenues for Redwire in 2020 are estimated to be $119 million with an Adjusted EBITDA of $13 million. For 2021, revenues are projected to be $163 million with an Adjusted EBITDA of $20 million. The agreement between AEI and Genesis Park values Redwire at $615 million which equates to a 47x valuation multiple of estimated 2020 Adjusted EBITDA and 31x projected 2021 Adjusted EBITDA. Redwire is projecting 2022 Adjusted EBITDA of $32 million for a 19x valuation multiple. More financial information can be seen on Genesis Park Acquisition’s 8-K filing HERE.

“As an innovative space infrastructure leader, Redwire is set to power a new age of space travel, exploration, and commerce,” said Kirk Konert, a partner at AEI. “With this transaction, Redwire will have even greater opportunities to drive growth and value by delivering tailored, responsive solutions for its growing customer base across the public and private sectors.”

Boca Raton-based AEI invests in the aerospace and defense, power generation, and specialty industrial sectors with a specific focus on technical manufacturing; distribution and supply chain management; maintenance, repair, and overhaul; and industrial service-based businesses. Typical company targets will have from $50 million to $500 million of revenue. In July 2018, the firm held a final hard-cap closing of its second private equity fund, AE Industrial Partners Fund II LP, with $1.36 billion in commitments.

Genesis Park Acquisition (NYSE: GNPK), one of the first aerospace and aviation services focused SPACs, closed its initial public offering in November 2020 and is sponsored by Genesis Park, a control investor in lower middle-market companies that have revenues from $5 million to $100 million and EBITDA of $2 million to $20 million. Genesis Park was founded by Paul Hobby and Peter Shaper and is headquartered in Houston.

“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,” said Mr. Hobby. “We are very excited about Redwire’s growth potential and we look forward to partnering with Peter and his team as they help usher in this new era of space exploration.”

AEI will remain a significant shareholder in Redwire following the completion of this transaction which is expected by the end of the second quarter of 2021.

Jefferies is the financial advisor to Redwire, and Kirkland & Ellis is providing legal services.

© 2021 Private Equity Professional | March 26, 2021

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