Without a long term space plan, the Canadian Space Agency (CSA) is forced into the position of reacting to the initiatives of others.
It therefore seems certain that CSA President Steve MacLean is watching closely for any public reaction to the Friday announcement that Canadian space focused icon MacDonald Dettwiler (MDA) has just gotten out of the property information business by selling the assets to TPG Capital, a private equity firm formerly known as Texas Pacific Group, for $850 million.
The sale does not affect the firm's position as prime benefactor of Canadian government contracts relating to Earth imaging and arctic sovereignty such as the RADARSAT Constellation program.
Earlier in the week, Federal Industry Minister Tony Clement even wished Canadian satellite RADARSAT 1 (a predecessor program to the RADARSAT Constellation) a happy 15th birthday, according to the November 4th, 2010 Industry Canada press release "Minister Clement Celebrates the 15th Anniversary of the Canadian RADARSAT-1 Satellite."
Now it looks like MDA has found an appropriate $850 million birthday present.
For those who prefer primary source material, the official November 5th, 2010 announcement is posted on the MDA website under the headline "MDA To Divest UK and North American Property Information Business." According to the press release:
MDA is currently reviewing its long-term business strategy and will retain the proceeds from the sale until this process is completed and future cash requirements have been fully evaluated.The press release also states that the deal is subject to the "customary regulatory approvals and other approvals and consents typical for this type of transaction."
According to the November 5th, 2010 Dow Jones Newswire article "MacDonald Dettwiler: To Focus On Growth, Not Debt Paydown," MDA Chief Executive Dan Friedmann does not expect the deal to trigger a review by the Canadian government even though takeovers of Canadian companies by foreign-based firms are normally subject to a review if the asset value of the company being acquired exceeds C$299 million.
The Dow Jones article also states that:
Friedmann said the assets of MacDonald Dettwiler's property-information business are based primarily in the U.S. and U.K., not in Canada. "We have about 30 employees and some small assets in Canada related to this business. They amount to less than 10% of the Investment Canada threshold," he said.In direct contrast to the MDA press release, the Dow Jones article states that the company intends to use the proceeds from the sale to make "strategic acquisitions" to allow MDA to "bring its technology to new sectors" such as oil and gas and mining.
The November 5th, 2010 Globe and Mail article "MDA hopes to use cash for acquisitions" supports the Dow Jones assessment and indicates that the MDA geospatial services division will merge with the space operations division while new acquisitions will focus on businesses that could use existing MDA geospatial and space operations products:
...in a unique way such as those automating a part of their operating process with complex software. MDA is also trying to build bridges with companies in the resource sector because oil and gas firms are now the largest buyer of their remote imaging services, management said on the call.The good news is that MDA just might be talking about building a sales distribution network for their Earth imaging systems (assuming, of course, that the mass media reports are more reliable than the materials on the MDA website).
The bad news is that this makes the firm far less dependent on Canadian government contracts for ongoing revenue. Then again, maybe that's also good news for people, except for perhaps those government employees at the CSA.
I wonder if Steve MacLean could tell us what he's thinking.
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