MDA: MDA Space announces agreement to acquire Blue Canyon Technologies for $620M

Research evidence excerpt

MDA: MDA Space announces agreement to acquire Blue Canyon Technologies for $620M

revenue stemming from defense applications. Founded in 2008, BCT has built a strong

track record with 85+ spacecraft launched and over 3,500 products on orbit across its two manufacturing facilities in Denver,

Colorado. MDA expects the acquisition to provide a strategic manufacturing presence in the U.S., positioning it to capture growing

demand in the government defense space market. With 400+ skilled employees and a diverse, mission-flexible product portfolio,

BCT should bring both the talent and operational scale to meaningfully expand MDA's capabilities in the space economy.

The implied acquisition multiple is ~20.6x, steep for defense in our view, but in-line with space multiples. MDA expects BCT to

generate ~$30M of annual EBITDA (~$160M in revenue at similar 18-20% margins) which implies a deal cost of ~20.6x for BCT.

Although we believe this multiple could be considered at the upper end of valuation ranges for a defense prime, we believe the

acquisition is closer in-line with other space assets. What we specifically like about the acquisition is that MDA sourced it from

a U.S. defense prime, and not a more-speculative space asset. We believe MDA will make growing this business a key priority in

2027 once closed. MDA believes the acquisition will be accretive to both adj. EBITDA and EPS in 2027 and will keep its proforma

net leverage within 1.5-2.5x post-close. We believe the acquisition is supportive of MDA's desire to build its U.S. business, and

ideally should support incremental business opportunities in the U.S. and internationally. BCT should represent a profitable space

business that expands the TAM for MDA, and should provide synergy opportunities into its existing programs.