Canadarm maker to be acquired by Canadian investors in $1B deal

A Toronto-based investment firm has signed a $1-billion deal to buy the Canadian space technology company behind Radarsat Earth-observation satellites and the Canadarm robotic mechanisms on the International Space Station.

A consortium led by Northern Private Capital with financial backing from former BlackBerry co-chief executive Jim Balsillie will acquire all Canadian and U.K. operations of MacDonald, Dettwiler and Associates.

The group says MDA's corporate headquarters will return to Canada, where it employs more than 1,900 people.

MDA's headquarters and largest operations had been in the Vancouver area until Maxar Technologies was created to allow MDA's acquisition of Colorado-based DigitalGlobe, a producer of high-resolution Earth-imagery products.

The deal to repatriate MDA's Canadian operations will be financed by a number of sources including NPC, which is led by John Risley and Andrew Lapham, as well as Balsillie, Scotiabank, Bank of Montreal, and Senvest Capital, an investment firm based in Montreal.

Basillie is the former co-CEO of Canadian technology firm Research In Motion responsible for the development of BlackBerry. 

The acquisition of MDA will be financed through a combination of equity and debt.

The group sees significant growth potential for MDA under its new ownership.

Ownership returns to Canada

"Over its 50-year history, MDA has grown from a B.C.-based start-up into a world-class space technology company and an anchor of Canada's space program," said Risley said in a statement. "As a Canadian, I am so proud this iconic Canadian company will once again be owned and controlled in Canada."

Northern Private Capital says the acquisition of MDA is expected to close in 2020 following regulatory approvals.

Maxar Technologies said it is selling its Canadian unit in a bid to ease its debt. As of September, Maxar had a total debt of $3.1 billion US. 

"This transaction combined with the recently completed sale of real estate in Palo Alto [Calif.] reduces Maxar's overall debt by more than $1 billion," said chief financial officer Biggs Porter. 

The company's shares were up 16.2 per cent in premarket trading.