L3Harris Technologies has taken a significant step toward enhancing its focus on military space operations by selling a majority stake in its civil space propulsion unit to private equity firm AE Industrial Partners. The transaction, announced today, involves the sale of a 60 percent stake valued at $845 million, while L3Harris retains a 40 percent share in the unit that develops technologies primarily for NASA and other civil space activities.
In a statement, Chairman and CEO Christopher Kubasik emphasized the company’s commitment to aligning its portfolio with the core mission priorities of the Department of War. “L3Harris is strongly committed to the Department of War’s vision for a faster, more agile defense industrial base while remaining laser-focused on driving value for our shareholders and customers,” Kubasik stated.
The propulsion unit is known for its advanced technologies, including nuclear power systems designed for future missions to the Moon and Mars, as well as the RL10 engine, which powers the upper stage of the United Launch Alliance’s Vulcan heavy-lifter. Notably, the sale does not include the RS-25 rocket engine, the primary propulsion system for NASA’s Space Launch System, which is pivotal to the Artemis mission aimed at returning humans to the lunar surface.
New Entity to Carry On a Legacy
Following the acquisition, AE Industrial plans to rebrand the propulsion unit as Rocketdyne, a name steeped in history and innovation in space propulsion technology. This new entity aims to modernize its operations and production capabilities. Kirk Konert, managing partner at AE Industrial, remarked, “Rocketdyne is more than just a company; it is the birthplace of U.S. rocket propulsion.” He further highlighted that the transaction would breathe new life into a pioneer of space and national defense technology, creating a hybrid model that combines the strengths of a national defense prime with the agility of specialized investment.
AE Industrial has a track record of investing in commercial space companies, including York Space Systems, Redwire, and Firefly. The firm intends to apply modern manufacturing disciplines to enhance the production of the RL10 engine, ensuring that Rocketdyne remains at the forefront of space propulsion innovation.
The sale reflects a broader trend within L3Harris, indicating a strategic shift toward military-focused initiatives as it seeks to meet the evolving demands of national defense. This realignment is expected to strengthen the company’s presence in the competitive landscape of military space technology, positioning it well for future contracts and collaborations with government agencies.
Overall, L3Harris Technologies’ divestiture of its civil space propulsion unit marks a significant pivot in its business strategy, reinforcing its commitment to the defense sector while maintaining a stake in the growing field of civil space exploration. The transaction is poised to have lasting implications for both the company and the space industry at large, as it navigates the challenges and opportunities of the coming decades.
