Montreal, PQ based GHGSat Inc., currently preparing its GHGSat-D (demonstration) greenhouse and air quality gas (AQG) monitoring satellite (named "CLAIRE") for a scheduled April 2016 launch from India's Satish Dhawan Space Centre, has been selected to compete in the production category for the 9th Annual GreenTec Awards, Europe’s largest environmental and business prize.
The ten competitors in the "production" category of the 2016 GreenTec awards, including GHGSat (top row center). As outlined on the GreenTec website, production category awards "honor projects with innovative, holistic approaches to material and energy efficiency and/or the reduction of environmentally damaging byproducts in the production process." These include projects related to water usage and quality control, exhaust treatment, lightweight construction, energy recovery, process optimization, reject minimization, and the overall efficient usage of resources. Graphic c/o GreenTec.
The awards will be announced and presented on May 29th, 2016 in Munich, Germany. The GreenTec awards search out the most innovative and sustainable projects of the year and one out of three nominees per category will be directly chosen by online, public voting.
All of which means that, if you'd like an innovative Canadian company to win this award and get noticed by European industry, you need to vote for GHGSat when voting begins on December 8th, by checking out the website at http://www.greentec-awards.com/en/competition/online-voting-2016.html.
GreenTec Awards have been hosted in Germany since 2008 and serve as an example of the country's commitment to environmental issues. The event has provided a platform to promote environmental technologies with extensive media coverage and maximum public attention.
The GreenTec Awards Jury is supported by leading European experts, including the heads of the European Space Agency (ESA) and the German Aerospace Center (DLR), as well as popular artists and public figures.
The company is supported by a variety of Canadian Federal government technology funds, such as Sustainable Development Technology Canada and LOOK North, plus the Boeing Company, Suncor, Hydro-Quebec, Imperial Oil, Shell, Canada National Resources Limited and others.
For more information on GHGSat, please check out the November 30th, 2015 Commercial Space blog Special Report on GHGSat.
exactEarth president Peter Mabson. Photo c/o TheRecord.
Cambridge, Ontario based exactEarth is thinking big and they aren’t shy about making their intentions known.
Currently, exactEarth provides satellite tracking services to the global maritime market. On November 23, 2015 they took a minority ownership position in Myriota of Adelaide, Australia, as announced in press release, “exactEarth Invests in Satellite 'Internet-of-Things' Technology Company.” Myriota makes technology that connects devices globally.
This move is part of a strategy to get a piece of what’s predicted to be the next big technological development: The Internet of Things (IoT). Peter Mabson, president of exactEarth, confirmed the strategy in a November 23, 2015 article at The Record.com, “ExactEarth investing in Internet of Things startup.”
Many people don’t understand what the IoT is. Although at this point different definitions exist, Forbes magazine outlines one of them in the May 13th, 2014 article, “A Simple Explanation Of ‘The Internet Of Things’."
Daniel Lee (at bottom right), giving a presentation on "Internet of Things Monetization; Challenges and Chances," at the 2014 Internet of Things Conference, which was held from October 20th - 21st, 2014 in San Francisco, CA. It's worth noting that, as more and more devices are connected to the IoT, the connector of choice is likely to be the existing satellite communications system, which already hosts a surprising amount of internet traffic and which will expand to handle the increasing demands for bandwidth. Screenshot c/o HTML5DevConf & IoTaconf.
The key concept is this:
... the concept of basically connecting any device with an on and off switch to the Internet (and/or to each other).This includes everything from cell phones, coffee makers, washing machines, headphones, lamps, wearable devices and almost anything else you can think of.
This also applies to components of machines, for example a jet engine of an airplane or the drill of an oil rig...
... the analyst firm Gartner says that by 2020 there will be over 26 billion connected devices...that's a lot of connections (some even estimate this number to be much higher, over 100 billion).
The IoT is a giant network of connected "things" (which also includes people). The relationship will be between people-people, people-things, and things-things.
It’s easy to see why a satellite data company like exactEarth would want a piece of the IoT. Why just monitor ship activity when you can get a piece of monitoring everything?
So how does exactEarth’s latest move fit in to what they’ve done up until now?
Screenshot from the November 2015 Forbes "The Internet Of Things" video. As outlined in the video, ATM's were one of the first IoT devices as early as 1974; by 2020 approximately 250,000 vehicles will be on our roads and also connected to the internet; by 2020 the food and beverage industry could annually save up to 15% of their current costs through the adaption of IoT methodologies and the IoT will add between $15 - 20 trillion USD's to global GDP over the next twenty years. Screenshot c/o Forbes.
Whether or not COM DEV will have anything to do with exactEarth going forward is unknown.
Hisdesat, on the other hand, remains part of the strategy. As described on their website, “Hisdesat Servicios Estratégicos S.A. was founded in 2001 as a government satellite services operator to act primarily in the areas of defense, security, intelligence and foreign affairs. Since 2005 we have been providing secure satellite communications services to government agencies from various countries, and we are currently developing new earth observation and maritime traffic information (AIS) satellite constellations.”
Another exactEarth partner, Harris Corporation of Melbourne, Florida, bills themselves as “a world leader in space, geospatial and remote sensing solutions.” The connection between exactEarth and Harris is covered in the July 5, 2015 article, “The REAL Story Behind the Upcoming (Maybe) exactEarth IPO.”
The three companies combine satellite constellations, data capture and management, data processing and delivery systems, and secure communications expertise. This is where exactEarth’s minority ownership of Myriota comes into play.
Myriota bills themselves as a company with “Global Reach for the Internet of Things.” Adding a system designed specifically for the IoT pulls everything exactEarth has together for that Next Big Thing.
The IofT concept is a slow developing process that will take many years. Now is probably the best time for a company to build the structure needed to be a significant player in what could turn out to be the next revolution in technology.
Glen Strom.
The strategy is clear: exactEarth wants to be one of those companies.
Who says Canadian companies can’t think big?
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Glen Strom is a freelance writer and editor with a background in business and technical writing. Follow him on Twitter @stromspace for the latest on Canadian space stories.
US president Barack Obama has just signed into law the Commercial Space Launch Competitiveness Act (HR 2262) of 2015. The action is a pointed reminder that lawmakers, advocates and those who can access the resources are often the real facilitators of space exploration.
If Canada wishes to compete effectively in the next great space age, we might want to consider passing a similar law.
An infographic outlining the possible profits to be made from the nascent space mining industry. As outlined in the November 10th, 2015 press release, "Planetary Resources Applauds U.S. Congress in Recognizing Asteroid Resource Property Rights," the legislation encourages "private sector investment" and "a more stable and predictable regulatory regime." According to the November 16th, 2015 press release, "Deep Space Industries Congratulates U.S. Congress on Landmark Legislation," the extension of ownership rights under US law to now include recovered space resources, as outlined in HR2262, "will allow the capital markets to take a closer look at the space resource utilization industry, now that we have a legal framework for operations.” Graphic c/o Planetary Resources.
As outlined in the November 24th, 2015 Fortune article, "Obama is About to Give Private Space Companies a Big Break," the HR2262 bill has passed both the US Senate and Congress and was widely expected to be signed into law just before the US Thanksgiving holiday.
According to the article, HR2262 would extend a so-called “learning period” for the industry until at least 2023, keeping agencies like the Federal Aviation Administration (FAA) from regulating commercial space companies as closely as the rest of the aerospace industry. The intent of the bill is to exempt start-up "newspace" companies such as SpaceX, Blue Origin, and Virgin Galactic from most US government oversight and regulation for the next eight years, as they develop and test new technologies.
The current act is the follow-on from a 2004 bill, which was set to expire at the end of this year.
HR2262 also:
Defines and codifies ownership and extraction of resources in space in a manner consistent with existing US law.
Of course, not everyone is happy with the new law, especially its provisions related to the ability of individuals and the private sector to stake claims over space based assets as a preliminary to working those claims and ownership of the assets which may be derived from those claims.
As outlined in the November 26th, 2015 NewEurope article, "Obama signs controversial space ownership law," it "remains unknown whether the unilateral move by the US to claim space ownership is valid."
The article also quoted the Popular Science website that, "according to the Outer Space Treaty, which the US, Russia, and a number of other countries have signed, nations can’t own territory in space," and despite arguments claiming otherwise "this prohibition also extends to private entities.”
For those who'd care to check, there is one obvious, relevant and historical example of what did happen in a situation where resources were subject to multiple competing claims and jurisdictions.
One example would be the 1848 California gold rush. The initial find was in Sutter's Mill, California, which was then technically a part of Mexico, although the territory was under American military occupation in the aftermath of the Mexican–American War. This historical situation created an environment where local residents operated under a confusing and changing mixture of Mexican rules, military regulations, American principles and personal dictates.
So what happened?
Essentially, the initially unorganized locals (and not the far distant, competing governments in Washington and Madrid) coalesced their disparate principles and dictates into a coherent system of rules they could operate under, for which ownership of resources required both access to the resource being claimed and the ability to utilize the resource within a reasonable time frame. Those who couldn't access and work a claim would lose it in favor of those who could.
By the 1860's many of these ad-hoc regulations had been proven so successful at adjudicating claims and encouraging development that they had been incorporated into US Federal law, where they mostly remain to this day.
HR2262 is a logical progression of earlier US laws and regulations in this area.
And the earlier gold rush in California is of direct relevance now, when access to space is not easily assured by private prospectors or even nation states, and space activities are addressed by possibly contradictory national laws (the most recent of which is HR2262) and international treaties (especially the 1967 Outer Space Treaty).
Of course, the basics of the technology needed to harvest space resources has existed for some time, and access to space is now improving thanks to companies such as SpaceX, Blue Origin, and Virgin Galactic, who were given several additional years of reduced regulations as part of other provisions included within HR2262.
And now that at least one nation has allowed for the legal ability to make an advanced claim on space resources, we can begin moving forward in this area.
Chuck Black.
It least, that's the case if you're an American citizen or corporation subject to US laws which now include HR 2262.
But Canadians are neither creating the laws, nor building the rockets nor in possession of the appropriate assets to stake a competitive claim in this area.
We should change this and the first step in doing so is to pass our own version of HR2262.
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Chuck Black is the editor of the Commercial Space blog. He also wrote the second of three CSCA submissions to the 2012 Emerson Aerospace Review.
The new Federal government has come to the obvious conclusion that astronauts and scientists are sexy, knowledgeable and authoritative, which is probably why they were so much in evidence during Monday's First Ministers' meeting.
Prime minister Justin Trudeau with Canadian astronaut Jeremy Hansen at the First Ministers meeting on Monday, November 23rd. Given the obvious benefits which undoubtedly derive from simply standing next to an astronaut, it seems to be only a matter of time before the new Federal government announces a massive funding initiative to ensure a continued supply of these photogenic heroes. Photo c/o @csa_asc.
The meeting also discussed the next steps to support the successful resettlement of 25,000 Syrian refugees to Canada, with a focus on how to support their integration following a robust security screening process.
The last first ministers' meeting was in 2009.
Astronaut Hansen, who always seems to wear a NASA/CSA jumpsuit instead of a business suit to these sorts of events, posing with innovation minister Navdeep Bains and science minister Kirsty Duncan at the First Ministers meeting on Monday. Photo c/o @csa_asc.
Prior to the meeting, a climate science briefing was provided by senior environment and climate change Canada scientist Dr. Greg Flato and Ouranos executive director Mr. Alain Bourque. Ouranos is a Montreal-based consortium which focuses on climate science.
As outlined in the November 23rd, 2015 Canadian Press and National Post article, "Five things to know about the first ministers’ meeting on climate change ahead of Paris talks," the intent of the Monday meeting was to "demonstrate to the international community" that the new Canadian PM has "at least taken the first steps towards delivering on that commitment (to take steps to mitigate climate change) and that Canada is now serious about combating climate change after a decade in which the country was widely condemned as an environmental laggard."
Now that the photo-ops are done, expect new Canadian based but space focused technology suitable for measuring and mitigating climate change to surface, in the run up to the Paris meeting.
CSA president Laporte at the summit on November 18th. Photo c/o Chris Gainor.
It's noteworthy that neither Canadian Space Agency (CSA) president Sylvain Laporte, who finally made his first domestic job related speech during the 2015 Canadian Space Summit in Vancouver, nor new Federal innovation minister Navdeep Bains, during his presentation at the 2015 Canadian Aerospace Summit in Ottawa, focused their talks on anything other than getting up to speed on their jobs and building on the accomplishments of their predecessors.
Both know full well that the real challenge for political players is to simply "hold on to your hats" and "go with the flow" until the current firestorm of changes now underway is mostly complete, defined and understandable.
Only then will either be in a position to do what government does best and push, file, stamp, index, brief, debrief and number those changes into a nicely wrapped package comprehensible to the typical public servant.
Laporte was perhaps the most overt. He confessed that he had indeed appeared at international events since appointment in March, 2015 as CSA president, but that this was his first domestic event. He said he was still learning the space arena and felt that, at least in his current position, “every day is a new discovery.”
He also mentioned his five year mandate and commented that "I plan to be here for the duration.” He even credited his predecessor, ex-CSA president, former defence chief and current deputy minister of veterans affairs Walt Natynczyk, who quarterbacked a series of changes "that were important to Ottawa," including the development of the 2014 space policy framework.
Laporte promised to work with both minister Bains and science minister Kirsty Duncan in a program expected to include "targeted investments" in space technologies, which may or may not be a veiled reference to additional funding for the CSA space technology development program (STDP),
UrtheCast CEO Scott Larson, perhaps the most successful of the new breed of Canadian based "NewSpace" entrepreneurs, also spoke at the 2015 Canadian Space Summit, which was held in Vancouver from November 19th - 20th. As outlined in the November 12th, 2015 Space News post, "UrtheCast Shelves New ISS Camera To Focus on Satellite Constellation," UrtheCast is currently preparing to role out "a 16-satellite constellation of eight optical and eight synthetic-aperture radar satellites in low Earth orbit." The project, if successful, will place the company in direct competition with Richmond BC based MacDonald Dettwiler (MDA) and its iconic RADARSAT Constellation mission (RCM), which uses much the same technology and is expected to be launched in 2018. According to the article, UrtheCast will subcontract the construction of the satellites to British based Surrey Satellite Technology Ltd. (SSTL) which, oddly enough, already gets subcontracting work from both MDA and the Canadian government. As outlined in the October 10th, 2011 post, "SAR Satellite Designers Living in Interesting Times," SSTL first rolled out plans for a new generation of low cost SAR satellites in 2011. Photo c/o Business Vancouver.
I have the Emerson report (the 2012 David Emerson led Aerospace Review, which was organized through the Aerospace Industries Association of Canada, which organized the summit, and served as the core of conservative government policy in this area under former Prime Minister Stephen Harper) on my desk. Rather than reading the 25 recommendations, I thought I would call Mr. Emerson instead.
I am aware of the work that the Association and its members did with Mr. Emerson on the Review of Aerospace and Space Policies and Programs.
I'm impressed by what has been accomplished, and I'll review what remains to be implemented...
He also promised to support research and technology development, ("a large focus for my department") encourage the trade of Canadian products and services abroad ("which is key to industry growth"), provide assistance with the safety certification of aircraft and parts (a "critical step in the development and production process") and assist with defence acquisition ("which has the potential to leverage significant industrial and technological benefits").
The real burr under the saddle of the new Liberal government has nothing to do with the space industry. It's the Bombardier C-Series, shown here taking off on its maiden test flight at the Bombardier facility in Mirabel, PQ on September 16, 2013. As outlined in the November 21st, 2015 iPolitics post, "Mr. Trudeau’s Bombardier problem," Montreal based Bombardier is looking for the Federal government to bolster the recent billion dollar Quebec government investment in the company, either by providing further direct financial support or else by facilitating the sale of Bombardier jets to Toronto based Porter Airlines, which intends to operate them from Billy Bishop Airport on the Toronto Islands. As outlined in the November 13th, 2015 Toronto Star post, "Ottawa kills Porter’s plans for island airport jets," the recent decision by transport minister Marc Garneau to reject this option sets the stage for a future battle between Montreal and Toronto based Liberal MP's. Even better, as outlined in the November 4th, 2015 Financial Post article, "Canada’s railways optimistic that new transport minister Marc Garneau can thaw frigid relations," the transport minister is shortly expected to receive an "arm’s-length review" of transportation issues from the very same David Emerson who headed the 2012 aerospace review. The more things change, the more they stay the same. Photo c/o Canadian Press /Ryan Remiorz.
Bains also categorized his role as being "to help Canadian businesses grow, innovate and export so that they can create good quality jobs and wealth for Canadians."
Of course, both presentations are full of good thoughts from good people who are at the beginning of their journey to define roles and there is certainly nothing wrong with any of the sentiments being voiced.
Chuck Black.
But, over the next few months, it might be for the best if we started judging both president Laporte and minister Bains by their slowly accumulating actions, and not simply by their far-too-easy to mouth, preliminary statements.
Hold on to your hats...
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Chuck Black is the editor of the Commercial Space blog.
The Curator Emeritus of the Smithsonian National Air and Space Museum has added to the history surrounding a small, amateur rocketry association, called the Verein für Raumschiffahrt (VfR) and based in Germany prior to World War II, which played a pivotal role in the launching of our first great space age.
Members of the Verein für Raumschiffahrt (VfR) on April 11th April 1930 in Berlin. Beginning on the left, the image shows Johannes Winkler, Willy Ley, an unidentified person (initially identified by Ley as Wernher von Braun, although the likeness bears little resemblance to known photos of von Braun during this period)), Rudolf Nebel, Max Valier and Erich Wurm. Frequently attributed to Spring 1931, the image was actually taken in April 1930 at an event which Ley described in his book "Rockets, Missiles and Space Travel." Valier was killed in a rocket explosion in May 1930, just days after this photo was taken. Behind the group can be seen a mock-up of a large Oberth rocket which is hanging from the ceiling on a parachute. Photo c/o The Space Library.
Frank H. Winter, who retired as Smithsonian curator of rocketry in 2007, has just completed a paper on the association, under the title "The German Rocket Society." The paper is currently available online for download on The Space Library.
Frank Winter. Photo c/o Frank Winter.
Winter takes pains to note that the historical German name for the organization, translates into English as the "Society for Spaceship Travel" or more rarely, the "German Interplanetary Society."
"It was never called the 'German Rocket Society,' or any variation of that name, at least in Germany," said Winter during a recent interview. "The members didn't even do much rocketry until half way through the VfR's existence."
That existence spanned only seven years, from 1927 until 1934, although the legacy of the organization was carried out throughout the war years and led directly to the postwar contributions of German scientists to the American Redstone missile and Apollo programs.
Of course, Winter has written about German rocketry before. His 1983 book, "Prelude to the Space Age: The Rocket Societies 1924-1940" (Smithsonian Institution Press, 1983), went into substantial detail on the VfR and became the gold standard for research in this area over the last 30 years.
Even Willy Ley, who may (or may not) have been a founding member of the VfR (he said he was), wrote in his 1957 book, "Rockets, Missiles and Space Travel," about the formative effect the VfR had on his efforts and the efforts of others.
Please Consider Subscribing to The Space Library.
For only $5 dollars a month, you get access to 30,000+ pages of space information and papers, including "The German Rocket Society" by Frank Winter and hundreds of hours of audio and video.
Your contributions help to support new research and the maintenance of the existing repository.
So why did Winter decide to revisit this well-tread historical path? That's an easy question to answer.
The VfR was the largest and most prominent association of that period and much new information on their activities has recently come to light...
Writing a new paper for the Space Library is a marvelous way to promote these new finds and also to help promote some of the other unique documents and source materials already preserved in the Space Library.
Among those unique documents are scans of every issue of "Die Rakete," the official publication of the VfR. Highlights from its first year of publication (1927) include articles on theoretical questions related to the best launch trajectories and times for trips to the Moon, Mars and other planets, radio communications between the Earth and Mars and a long article discussing Einstein's theory of relativity.
Chuck Black.
For more information on Frank Winter's latest contribution to the Space Library or to learn more about the repository, please click on the link above.
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Chuck Black is the editor of the Commercial Space blog.
Space makes up a small part of the aerospace market for Canada, so it may not be a major topic here.
Not unless one of the spacier attendees, like UrtheCast President Wade Larson, gets Mr. Bains in a verbal headlock and whispers in his ear about the joys of commerce in a galaxy far away.
Headlocks, verbal or otherwise, won’t be needed to get people talking about space at another conference that starts on November 19th in Vancouver. CSA President Sylvain Laporte will speak at the Canadian Space Summit, the yearly event put on by the Canadian Space Society (CSS).
It’s all space here—that’s what the CSS is about. Maybe Mr. Laporte will have something to say about the future of the space industry and the CSA.
Even if not much is revealed at either conference, there’s still reason to be optimistic about greater government support for Canadian space, and the hint comes from an unexpected source.
The government did something unusual. They released the ministerial mandate letters for all of the ministers to the public, something that observers say has never been done before by a federal government in Canada.
The letters for Mr. Bains, the minister in charge, and the other two ministers working with him, Minister of Science Kirsty Duncan and Minister of Small Business and Tourism Bardish Chagger, don’t give a lot of detail, but one of the three letters could be significant for the space industry.
Ms. Chagger's letter shows that she will take a support role with Mr. Bains and other ministers in promoting small business and tourism.
Ms. Duncan’s letter outlines that she is in charge of strengthening scientific research and development. She’ll create a position called Chief Science Officer to ensure that scientists are able to speak freely to journalists and the public about their work.
Ms. Duncan will also assist the minister of employment, workforce development and labour to create more co-op places for STEM students, and work with other ministries on bringing science-based evidence back into environmental assessments.
Mr. Bains’ letter is the one that could have implications for the space industry. It says he is to develop an innovation agenda that will expand “effective support for incubators, accelerators, the emerging national network for business innovation and cluster support, and the Industrial Research Assistance Program.” (Note that the Industrial Research Assistance Program (IRAP) is designed to help “accelerate the growth of your business through innovation and technology.”)
The directive goes on to say that “...These investments will target key growth sectors where Canada has the ability to attract investment or grow export-oriented companies.”
That sounds like it should include the space industry, doesn’t it? Maybe that innovation agenda is something Mr. Bains will expand on at the AIAC conference.
Glen Strom.
So now we wait and see if that other shoe hits the ground. Those of you who’ll be in Ottawa or Vancouver next week may be in the best position to hear a thump.
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Glen Strom is a freelance writer and editor with a background in business and technical writing. Follow him on Twitter @stromspace for the latest on Canadian space stories.
Sometimes you get what you want. Or so it seems. The newly elected Federal government hasn’t said who will have responsibility for space, but what used to be Industry Canada would be a logical choice.
Yes, past tense for Industry Canada.
The newly minted Innovation Minister Bains at a press conference on Parliament Hill on November 6th. As outlined in the November 6th, 2015 Huffington Post article, "Liberals Unmuzzle Canadian Scientists, Promise They Can Now 'Speak Freely,'" he was fulfilling a Liberal party campaign promise to allow government scientists and experts to speak freely about their work to the media and the public. Photo c/o Adrian Wyld/CP.
A new ministry with three new ministers. Graphic c/o Wikipedia.
CATA believed that a “newly refocused department would send a message that the federal government is serious about making business innovation the keystone of its economic policies.”
The head of the super-ministry is Navdeep Singh Bains. Mr. Bains previously served in parliament in the Paul Martin Liberal government, and later as a member of the opposition. He temporarily lost his seat in the 2011 election to Conservative Eve Adams.
People in the automotive industry are enthusiastic about his appointment to this ministry, as outlined in a November 4th, 2015 article at the Windsor Star, “High hopes for new federal minister in charge of auto industry.” Mr. Bains worked as an accountant and financial analyst for the Ford Motor Company for several years.
Even if it turns out that Mr. Bains isn’t in charge of space, just substitute the name of the minister who will be. The following questions won’t change.
Right now, everything is up in the air (no pun intended) until the new government starts to make its mark, or perhaps leave a mark, depending on what it does.
Minister of Science Kirsty Duncan and Minister of Small Business and Tourism Bardish Chagger. Will either of them be saddled with the responsibility of supervising the CSA? Photo's c/o Celebrity Speakers Bureau & the Liberal Party of Canada.
And what about the red-headed stepchild, the Canadian Space Agency (CSA)? Will the CSA get a clear mandate, proper funding, a long-range plan, and the independence to execute that plan without politicians meddling in the day-to-day affairs?
Or will the agency continue to meander, doing not much more than acting like the vice-principal of a high school making sternly-worded phone calls to miscreants who step over the party line?
How different will the new minister be from his predecessor at Industry Canada, James Moore? Will he be the new sheriff in town, or will it be meet the new boss, same as the old boss?
Glen Strom.
CATA says they got what they wanted. Will the space industry?
Considering how many promises the Liberals made during the election and the major issues, and high expectations, facing their new government, we’ll likely find out sooner than later.
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Glen Strom is a freelance writer and editor with a background in business and technical writing. Follow him on Twitter @stromspace for the latest on Canadian space stories.
It's official. US based Honeywell International, a Fortune 100 conglomerate that produces a variety of commercial and consumer products, services and systems for private consumers, major corporations and governments, has offered to purchase Cambridge, Ontario based COM DEV International, one of the three largest Canadian space companies, for what is generally estimated to be $455Mln CDN.
But that total doesn't include the expected proceeds to shareholders from the public offering for exactEarth - a COM DEV subsidiary - which could potentially add enough to the deal to drive it past the $600Mln CDN total needed to trigger a Federal government review under the Investment Canada Act (ICA).
The 2014 COM DEV annual financial report. According to the company website, "COM DEV manufactures advanced technologies and subsystems which are sold to major spacecraft builders and space agencies worldwide for use in communications, space science, and remote sensing. Our technology is used on more than 950 spacecraft to date, including 80 percent of all commercial communications satellites ever launched. In addition, through recent acquisitions we are taking our core expertise in RF/microwave engineering into non-space niches where customers value premium RF performance and high reliability in harsh environments." As outlined in the January 15th, 2015 press release, "COM DEV Announces Fourth Quarter and Year-End Fiscal 2014 Results," total fiscal year 2014 revenue was $208.2Mln CDN, down 3.4% from fiscal 2013, largely as a result of continued U.S. government spending constraints. But revenue in the commercial equipment sector increased year over year by 26.5% to $137.4Mln CDN from $108.6Mln CDN during the same period. The company employs 1,250 people in Canada, the United Kingdom, the United States, India and China. Graphic c/o COM DEV.
COM DEV shareholders will receive up to $5.25 CDN in cash per share of COM DEV they currently own (for an estimated total value of $455Mln CDN), plus 0.1977 of a share of exactEarth Ltd., for an aggregate implied transaction value of up to $6.54 CDN for each COM DEV share.
exactEarth Ltd. will become a standalone public company.
An aggregate implied transaction value for the total sale (including the exactEarth shares) at a price of $6.54 implies a total valuation of approximately $580Mln CDN (with approximately $125Mln CDN of the total attributable to exactEarth shares), which is just under the current $600Mln CDN "threshold for review" as listed on the ICA webpage.
However, at least until the latest announcement was made this week, the estimates of potential exactEarth value have generally been far higher.
The article quoted Paradigm Capital analyst Daniel Kim as stating that the current $125Mln CDN valuation for exactEarth in the latest offering is "far below" the previously floated IPO range of from $157Mln to $187Mln CDN for the company.
Kim also confirmed a much higher potential value for a stand-alone exactEarth, and thinks the Honeywell offer provides a “huge” potential upside for the educated investor.
A valuation of even $157Mln CDN for exactEarth, when added to the Honeywell valuation of $455Mln CDN for COM DEV would place the total value of the deal at $612Mln CDN, well over the $600Mln CDN required to trigger a Federal government review under the ICA.
Even the valuation of COM DEV alone could be problematic from the ICA perspective. As per the November 8th, 2015 Space News article, "Honeywell To Acquire Component Maker Com Dev," Com Dev has invested in positioning itself for expected, but not yet closed, business from the upcoming 900 satellite OneWeb Constellation (as has at least one other Canadian company, Burnaby, BC based MacDonald Dettwiler). The closing of this business would certainly change the valuation of COM DEV.
As well, the access to the US market, provided through the Honeywell purchase would also increase the profitability of COM DEV, which recently closed a California-based subsidiary staffed with US security cleared personnel, for lack of work.
A quick, 60 second overview of the Investment Canada Act, from Omar Wakil, for the Canadian Bar Association. Screen grab and video c/o CBA.org.
Of course, any deal still requires the support of two-thirds of shareholders, who are expected to vote on the offer at the January 2016 COM DEV shareholders meeting. Only then will we find out what the investors think about the "enterprise value" of their investments.
But there are also national security provisions in the ICA.
These provisions, separate from the well understood "net benefit review" which has been in place since the 1980's, are far less well understood and have only been in place since 2009. Under the Stephen Harper government, there wasn't a lot of guidance or public discussion about how the provisions were enforced, and it's not likely that the current government will get up to speed in this area anytime soon.
So if you're opposed to the sale of an iconic Canadian company to a US multinational, this is a good a place as any to start.
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Chuck Black is the editor of the Commercial Space blog.
Once, it seemed like the quarterly MacDonald Dettwiler (MDA) investor conference calls simply weren't complete without one or two threats from MDA CEO Daniel E. Friedmann to move his company facilities out of Canada and into a country which promised to purchase more MDA products.
All I can tell you is that in the run up to the election, the Liberals made positive statements with both respect to space and the defense part that we're interested in, because they spoke about a renewed focus on surveillance and control of the Canadian territory, in particular the Arctic which is what our two biggest space programs (the winding down RADARSAT Constellation mission and the upcoming, but so far unfunded Polar Communication and Weather mission) are centered on.
They also spoke about developing a long-term strategy and so on.So they're the ones that were focused on that and I think we can remember that the last time the Liberals were in power, they were incredibly supportive of space and international partnerships and science and the country's space industry and MDA had a very, very thriving existence at that time in Canada.
But that's just what's been said so far and what happened in the past. I have no basis to be able to tell you whether things are going to revive in 2016 or not.
It is an emergency situation. I think the government is aware of that because a lot of work is winding down and capabilities being lost. So I think they're aware of the issues, but I don't know how they rank with respect to everything else they have to do.
However, as outlined in the October 29th, 2015 Space News article, "MDA Hoping to Ramp Up OneWeb Work in 2016," MDA isn't totally depending on the good graces of the incoming Liberals to shore up its Canadian base.
According to the article, MDA has also secured an unspecified contract with NewSpace start-up OneWeb Ltd. to develop satellite payload components for a constellation of approximately 900 proposed low orbiting satellites intended to provide global internet delivery to rural areas. Work is expected to take place in MDA's Montreal facilities, beginning in 2016. The Montreal facility is currently working on RADARSAT Constellation.
Of course, there are always caveats. According to the article, MDA's "new status as a member of the OneWeb Ltd. team – presumably in return for an equity investment that MDA has not disclosed – to date has resulted in no contracts for OneWeb’s 900 satellites."
“I wouldn’t characterize it as a contract,” Friedmann said of MDA’s OneWeb work. “We are working, we are getting paid but we don’t have a fixed-price contract. We’re just a member of the team. The program is proceeding toward defining what it is going to look like and still has to raise a couple of billion dollars, which we’re trying to help with."
The article also covered other MDA sales opportunities, the financing troubles its been having at its Space Systems Loral (SSL) subsidiary given the temporary closure of the Export-Import Bank of the United States (Ex-Im), which normally guarantees funding for these sorts of projects (it's considered a short term political problem, at least as outlined by the October 29th, 2015 Air Transport World post "One man is keeping Ex-Im closed") and the assistance provided by Export Development Canada (EDC) in at least one instance, even though none of the funded SSL satellite construction work would occur in Canada.
But it's worth noting that investor support for MDA has reached a plateau over the last few months and the latest conference call hasn't changed that perception. For example, ScotiaBank has scaled back its expectations for MDA stock as outlined in the November 2nd, 2015 Dakota Financial News article "Scotiabank Cuts Macdonald Dettwiler & Associates Price Target to C$88.00 (MDA)" and other financial institutions are likely to soon follow suit.
Either the US Ex-Im needs to reopen or else OneWeb needs to raise a few billion more to fund its satellite constellation or else some other market is going to need to open up for MDA products and services.
Chuck Black.
If none of that happens over the next little while, MDA CEO Friedmann is going to need to start sucking up to the new Liberal government even more so than he did last week.
Yes, indeed! Mr. Prime Minister!
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Chuck Black is the editor of the Commercial Space blog.
It’s not a bad idea for some. Eventually, sub-orbital tourism and scientific flights, as well as small satellite launches, will become a good business. But one thing seems to be missing from the plans for too many of these spaceports.
How will they make money until the spaceships show up? How many spaceports are being planned and built on a field-of-dreams business model?
Good movie. Bad business plan. Graphic c/o Universal.
In the 1989 movie “Field of Dreams,” Kevin Costner plays an Iowa farmer named Ray Kinsella. Ray is out in the field one day and hears a disembodied voice whisper, “If you build it he will come.” Ray cuts down the corn field and builds a baseball field. Soon, the field is populated by the ghosts of long dead major-league baseball players.
The movie, which has a heartwarming ending, was a big success.
But that’s the movies. Real-life ventures based on “If you build it he (they) will come” don’t usually work out as well. As an example of that, and potentially a business-school case study for what not to do, look at Spaceport America (SA). An October 26th, 2015 article at Popular Mechanics, “Welcome To the Ghost Town That Virgin Galactic Built,” tells the tale of unfulfilled expectations.
Located 32 km southeast of Truth or Consequences, New Mexico, SA was supposed to be the cutting edge of commercial space with Virgin Galactic (VG), the company run by flamboyant billionaire and part-time space-whisperer Richard Branson, as its signature tenant.
At this point success for SA remains firmly out of reach. The crash of VG’s SpaceShipTwo on October 31, 2014 in the Mohave desert and a promise of flights within 2 years of building the facility (that promise is now in its 10th year) has left SA without much to show for their commitment.
Spaceport America in 2015. Although not abandoned, as outlined in the October 26th, 2015 Popular Mechanics post, "Welcome To the Ghost Town That Virgin Galactic Built," the facility, once supposed to be the bustling home for private space activities, is currently "little more than a movie set." Photo c/o John Wenz.
Now, some of those politicians who listened to Mr. Branson’s corn-field whispers might be looking to get the spaceport off their hands, according to a February 23, 2015 article at Gizmag, “Could Virgin Galactic's Spaceport America be put up for sale?”
Ironically, in the article, New Mexico state Senator George Munoz, sponsor of the bill to sell SA, uses the “If we build it they will come” quote from the movie to describe the expectations of good times that haven’t materialized.
Spaceport America’s plight also gets a mention in an October 26th, 2015 article at The Space Review, “Looking back a year and a decade.” Most of the article is about other areas of commercial space, but SA gets their moment under the microscope near the end.
Christine Anderson, Chief Executive Officer of Spaceport America, says they are working to get new tenants while they wait for Virgin Galactic, but she doesn’t expect the facility to be financially self-sufficient until at least late 2017 or early 2018. That could be causing a serious pucker factor for the politicians because the next state election in New Mexico is in 2018.
Ms. Anderson is also quoted as saying they need to be resourceful and resilient in the face of these setbacks. Perhaps they wouldn’t need to be quite so resourceful and resilient if they hadn’t put together a field-of-dreams business model in the first place.
Without a business plan that will make money until the day comes when spaceships are flying, many of those spaceports may revert back to being corn fields, deserts, or whatever they were before.
Is there a defence against the dreaded field-of-dreams pitch? Yes there is, and it’s offered here free of charge to business people with dollar signs in their eyes, and politicians with votes in theirs.
If a space-whisperer has this fantastic idea of building an awesome spaceport that will bring in millions and make you a hero for life, ask one question: What’s the plan for making money until the spaceships finally come to the facility?
Glen Strom.
If the answer is “uh, great question,” smile, show them the door, and watch the movie “Field of Dreams.”
You’ll get the feel-good buzz you want for a lot less money and far less trouble.
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Glen Strom is a freelance writer and editor with a background in business and technical writing. Follow him on Twitter @stromspace for the latest on Canadian space stories.
