AE Industrial looks to the stars as it builds a space-tech platform

The PE firm recently bought Made in Space to build out its newly launched platform Redwire.

AE Industrial Partners bought its third space architecture company last week in a bid to build out a mid-market space tech platform.

Made in Space, a Jacksonville, Florida-headquartered company, is the latest addition to Redwire, a platform formed early this month following its acquisition of Deep Space Systems.

All three companies that collectively form Redwire – Adcole Space, Deep Space Systems and Made in Space – were acquired during the covid-19 pandemic.

Deal conversations around the in-space 3D printing company started in the March-April timeframe and closed on Monday, June 22.

Due diligence was conducted virtually with some socially distant in-person facility tours, with a letter of intent signed about a month before the deal’s completion, according to Kirk Konert, an AEI partner.

The company faced some supply-chain disruptions amid the pandemic, but the market downturn had no impact on the deal valuation, according to Konert.

“We would have done this deal pre- or post-pandemic,” said Konert, speaking from his Florida home.

The Boca Raton, Florida-based PE firm plans to continue building Redwire through more acquisitions and organically. “We are trying to build a premier middle-market company that has an innovative way to build space systems,” said Peter Cannito, an operating partner at AEI and Redwire’s CEO.

Space-tech, much like the broader technology sector, remains insulated from the covid tremors. For example, tech giants like Uber are dependent on in-orbit GPS sensors manufactured by companies like Adcole Space.

“We have become more and more reliant on tech,” Cannito said.

When it comes to acquiring space architecture companies, AEI looks for flight heritage or the number of missions a company’s systems and components have flown in outer space.

“Disruptive start-ups have a lot of good ideas but don’t have flight heritage,” said Cannito.

By acquiring companies that have proven their space qualification through successful space launches, AEI plans to create a platform which falls between a start-up and a traditional large contractor.

Made in Space was funded through AE Industrial Partners’ $1.36 billion Fund II. Certain company shareholders rolled equity into Redwire, Konert said.

No financials were disclosed but Made in Space falls within the PE firm’s investment criteria, which targets companies with annual revenues of up to $1 billion.

“Space, given the expected growth in near term, has traded at relatively high multiples versus the broader M&A market,” said Konert.

There was also a management shuffle in connection with the transaction. The former CEO of Made in Space, Andrew Rush, joined Redwire as COO.

Action Item: Check out AEI’s latest form ADV.