MDA Space NYSE:MDA, a Canadian space company, plans to acquire a 70% stake in Collecte Localisation Satellites SAS, a French provider of space-based technologies and data analytics services, for 567 million, or about $649 million. To help finance the transaction, MDA Space will issue 23 million shares at C$35.60 each through an upsized bought-deal offering expected to raise C$819 million. Some of the proceeds may also be used to repay debt. Investors reacted cautiously to the financing plan, with MDA shares falling 7.5% to C$50.81 in Toronto trading as of 11:38 a.m.
MDA Chief Executive Officer Mike Greenley said the combination could create a growing, profitable and vertically integrated geospatial services business while preserving important capabilities in France and Canada. The acquisition is expected to double MDA's recurring revenue stream, which could strengthen the company's exposure to more predictable sources of revenue. Collecte Localisation Satellites, founded in 1986, has about 1,200 employees and serves customers across 150 countries. The company is currently owned by CNES, the French space agency, and Compagnie Nationale a Portefeuille, an investment firm. Under the proposed transaction, CNES would retain a stake of roughly 30%, while Compagnie Nationale would sell its entire interest.
The transaction is expected to close by the end of 2026 or in early 2027, subject to customary approvals. The acquisition also appears to extend MDA's push into markets outside Canada after the company raised $300 million through its U.S. initial public offering in March and announced the acquisition of Blue Canyon Technologies, a U.S.-based company, in June. The Blue Canyon transaction is expected to close by the end of the year. For investors, the potential doubling of recurring revenue and broader international reach may support MDA's long-term growth strategy, although the expanded share offering could create near-term dilution and the company will still need to complete and integrate both acquisitions.