Author: admin

WASHINGTON — Intuitive Machines says its acquisition of satellite manufacturer Lanteris Space Systems will open new opportunities for the company, from participation in Golden Dome to developing a crewed lunar lander.

Intuitive Machines announced Nov. 4 that it had reached an agreement with Advent International, the private equity firm that owns Lanteris, to purchase the company for $800 million in cash and stock.

On an investor call after the announcement, company executives said buying Lanteris, previously known as Maxar Space Systems, will allow Intuitive Machines to expand beyond its lunar-focused markets, such as landers and relay satellites, into new applications.

“Intuitive Machines is positioned to become the next-generation space prime, applying our demonstrated agility and innovation with Lanteris’ unmatched satellite production scale and proven spaceflight reliability,” said Steve Altemus, chief executive of Intuitive Machines.

“The transaction represents the next step in Intuitive Machines’ evolution from a lunar-proven space infrastructure company to a vertically integrated space prime provider of choice, serving national security, civil and commercial customers.”

One opportunity Altemus cited is Golden Dome. Lanteris has contracts to provide its Lanteris 300 satellite buses to L3Harris for that company’s Space Development Agency (SDA) awards for Tracking Layer Tranche 1 and Tranche 2 satellites.

Those contracts “unlocked the potential of Lanteris 300 series spacecraft for national security applications and established it as a trusted, competitive supplier,” Altemus said. He added that the combination with Intuitive Machines could amplify that position.

“As Golden Dome takes shape, the combination of the ingenuity and innovation that Intuitive Machines brings with its systems and communications and navigation schemes, coupled with the very capable satellite buses produced by Lanteris, offers unique solutions that I don’t think are in the market today with any other vendor,” he said. “We feel like we’re in a good position for the future opportunities coming out of Golden Dome.”

The acquisition also advances Intuitive Machines’ lunar ambitions. Altemus suggested the company may use Lanteris’ capabilities to develop a larger lunar lander, potentially one capable of carrying astronauts.

“We actually are in a fantastic position to build a team and offer solutions for the Human Landing System. NASA is keenly interested in finding a way to deliver that earlier,” he said. “Intuitive Machines is going to throw our hat in the ring with Lanteris by our side and other companies joining our team. So you can expect an offering from Intuitive Machines.”

It’s currently unclear what ring, if any, Intuitive Machines will be able to throw its hat into. NASA Acting Administrator Sean Duffy announced Oct. 20 that the agency would “open up” the existing Artemis 3 contract to competition, but so far that means only seeking acceleration options from Blue Origin and SpaceX and a request for information, which has not yet been publicly released, for other companies.

Another lunar opportunity created by the acquisition could come from using Lanteris’ satellite buses for lunar spacecraft. Altemus said that while Intuitive Machines is building the first three satellites for a lunar communications relay constellation to serve NASA and other customers, future spacecraft may be built by Lanteris.

“We anticipate in that lunar constellation that there will be more demand and more customers for the satellites as we move forward over the coming three or four years, and so we’re anticipating that need and providing more capability for size, weight and power on those buses,” he said. That could include providing cislunar space domain awareness capabilities using those satellites.

He added that using larger Lanteris satellites for the lunar constellation “can prove out the capability for Mars data relay, and essentially those satellites would be precursors to Mars data relay satellites in the future.”

Intuitive Machines shared few details about how the Lanteris deal came together. “We had an M&A strategy that we’ve been working on for some time,” Altemus said, referring to mergers and acquisitions. He noted that in August, the company announced an agreement to acquire KinetX, which specializes in deep-space navigation and mission design, for $30 million.

“It was small but strategic, and they’re brilliant people that we added to the company. Next on the list was Lanteris,” he said.

The deal is financed in part by proceeds from a $345 million sale of convertible notes in August. The company said at the time that it planned to use most of the funds for general corporate purposes, including potential acquisitions.

“In August, we completed a $345 million gross convertible note offering with the intent to acquire a company that would transform us into a next-generation space prime,” said Pete McGrath, chief financial officer of Intuitive Machines. “Lanteris is that company.”

Related

Generally speaking the aim of active stock picking is to find companies that provide returns that are superior to the market average. And in our experience, buying the right stocks can give your wealth a significant boost. For example, long term United Overseas Bank Limited (SGX:U11) shareholders have enjoyed a 58% share price rise over the last half decade, well in excess of the market return of around 43% (not including dividends). However, more recent returns haven’t been as impressive as that, with the stock returning just 1.1% in the last year, including dividends.

So let’s assess the underlying fundamentals over the last 5 years and see if they’ve moved in lock-step with shareholder returns.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part – they are all under $10bn in marketcap – there is still time to get in early.

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it’s a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last half decade, United Overseas Bank became profitable. That’s generally thought to be a genuine positive, so investors may expect to see an increasing share price.

The company’s earnings per share (over time) is depicted in the image below (click to see the exact numbers).

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It’s fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for United Overseas Bank the TSR over the last 5 years was 104%, which is better than the share price return mentioned above. And there’s no prize for guessing that the dividend payments largely explain the divergence!

United Overseas Bank provided a TSR of 1.1% over the last twelve months. But that was short of the market average. On the bright side, the longer term returns (running at about 15% a year, over half a decade) look better. It’s quite possible the business continues to execute with prowess, even as the share price gains are slowing. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we’ve spotted with United Overseas Bank .

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Singaporean exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.