Redwire Expands Military Focus with Hera Systems Deal

As space exploration becomes more accessible and competitive, the demand for breakthrough technology is rapidly increasing. Redwire (NYSE: RDW) is stepping up in a big way by acquiring Hera Systems, a company known for its advanced spacecraft and focus on national security missions. This deal is Redwire’s tenth acquisition in just a few years and is expected to bolster its portfolio, particularly in geostationary orbit (GEO) missions.

Founded in 2013, Hera has made a name for itself by developing high-performance spacecraft tailored to the needs of national security missions. Hera’s expertise in cyber-secure communications, power systems, and mission-specific machine learning is a huge asset to Redwire. Its work with the U.S. Space Force, particularly in developing satellites for the Tetra-5 mission—an initiative to demonstrate satellite repair and maintenance capabilities in space— highlights its expertise in supporting critical on-orbit servicing demonstrations in GEO.

However, what makes this acquisition particularly interesting for the 3D printing industry is Hera’s collaboration with other companies on advanced space technologies. For example, their work with Aerojet Rocketdyne on the MPS-121/131 modular propulsion systems stands out. These systems are some of the first to use 3D printing to combine different parts into one unit, making them powerful and efficient while also being small enough to fit in compact satellites.

Aerojet Rocketdyne, now part of L3Harris Technologies, reflects the broader industry trend of integrating 3D printing in critical aerospace components. Hera has also partnered with BAE Systems, a company well-known for its extensive use of 3D printing in the defense and aerospace sectors, and has collaborated directly with L3Harris on other space-related projects.

Redwire itself is no stranger to 3D printing technology. The company has been at the forefront of developing and deploying 3D printing machines in space, including in-space manufacturing capabilities that are critical for the next generation of space missions. Integrating Hera’s technologies with Redwire’s existing infrastructure could lead to more progress in 3D printing applications for space missions.

The combination of Redwire’s focus on Very Low Earth Orbit (VLEO) platforms with Hera’s expertise opens up new possibilities for using 3D printing. This could lead to the creation of more efficient and durable spacecraft components that are faster and cheaper to produce than traditional methods.

Over the past two decades, the cost of launching satellites has significantly decreased, dropping to about one-tenth of what it was 20 years ago. This cost reduction has contributed to a surge in space activity, with space launches increasing by more than 50% annually from 2019 to 2023.

This boom in space exploration has impacted the demand for spacecraft components, driving companies like Redwire to expand their capabilities and product offerings. In fact, Redwire’s revenue saw a notable increase of 40.95% in the first half of 2024. By acquiring Hera, Redwire is positioning itself to better meet the growing needs of the space sector, especially in specialized national security missions. As it expands its capabilities in national security space missions, the demand for 3D printed components could increase, driving further investment in additive manufacturing.

Redwire has already made significant strides in the national security space domain, recently securing a prime contract to develop and demonstrate a VLEO spacecraft for the Defense Advanced Research Projects Agency’s (DARPA) Otter program. This program focuses on creating agile, cost-effective satellites that can operate in VLEO, a region of space that presents unique challenges but also offers strategic advantages for defense and surveillance missions.

In addition to this, Redwire has been a key player in supporting military operations by supplying antennas for the Space Development Agency’s Transport Layer program, which aims to create a network of satellites to improve global military communication. These achievements, combined with the integration of Hera, could amplify Redwire’s capabilities.

“Hera Systems’ platform is highly complementary with Redwire’s suite of national security space solutions,” said Peter Cannito, Chairman and CEO of Redwire. “Similar to our focus on VLEO platforms, we see increasing opportunities to unlock and deliver new solutions in MEO [medium Earth orbit], GEO and other domains to support the warfighter and address critical needs in National Security Space. This transaction fits squarely within our growth strategy by adding significant capabilities to move up the value chain in select areas of emerging hybrid architectures.”

As Redwire adjusts its revenue guidance upward in anticipation of this acquisition, it’s clear that the company sees significant growth potential in integrating Hera into its operations. With Hera’s profitable topline growth, including $15 million in revenue for the year ended December 31, 2023, Redwire expects this acquisition to contribute to its future growth and profitability. The deal, which Redwire will finance with balance sheet liquidity, is expected to close in the third quarter of 2024.