L3Harris Technologies has announced the sale of a majority stake in its civilian space propulsion unit to private equity firm AE Industrial Partners for $845 million. This strategic move reflects L3Harris’s intent to sharpen its focus on the military space sector. The transaction involves the sale of a 60 percent stake, while L3Harris will retain approximately 40 percent ownership of the unit, which develops technologies for NASA and civil space endeavors.
In a statement, Chairman and CEO Christopher Kubasik emphasized L3Harris’s commitment to aligning with the U.S. Department of War’s vision for a more agile defense industrial base. “This transaction further aligns the L3Harris portfolio with DoW core mission priorities,” he remarked. The propulsion unit’s offerings include advanced nuclear power systems designed for missions to the Moon and Mars, as well as the RL10 engine utilized in the upper stage of the United Launch Alliance’s Vulcan heavy lifter.
The sale notably excludes the RS-25 rocket engine business, a critical component of NASA’s Space Launch System, which is pivotal for the Artemis mission aimed at returning humans to the Moon. This distinction highlights L3Harris’s intent to retain key technologies that support national space objectives.
AE Industrial Partners has a history of investing in the commercial space sector, with prior involvement in companies such as York Space Systems, Redwire, and Firefly. In its announcement, AE Industrial noted that the newly formed entity will be named Rocketdyne, honoring its legacy and significant contributions to space propulsion technology. The original Rocketdyne was established in 1955 as a subsidiary of North American Aviation.
Kirk Konert, managing partner at AE Industrial, expressed enthusiasm for the acquisition, stating, “Rocketdyne is more than just a company; it is the birthplace of U.S. rocket propulsion.” He added that the transaction aims to rejuvenate this pioneering firm while fostering a hybrid model that combines the strengths of a national defense prime contractor with the innovative capabilities of a specialized investor.
The focus for Rocketdyne will be to modernize production techniques for the RL10 engine by implementing contemporary manufacturing practices. This initiative is expected to enhance efficiency and drive innovation within the space propulsion domain.
As L3Harris shifts its priorities towards defense and military applications, the sale to AE Industrial Partners marks a significant reorientation in the company’s strategy, aiming to better serve its shareholders and align with national defense objectives.
