Czech defence group CSG said it had become the largest shareholder in Canada’s MDA Space after buying a 9.5 per cent stake in the satellite builder on 13 October.
CSG paid an average of C$42.69 a share for 15.36 million shares, according to a filing with the US Securities and Exchange Commission (SEC) on 14 October. Estimations place that at around C$656m (€411m). The shares were bought in the market, so no new capital went to MDA, which is listed in Toronto and New York.
MDA builds low orbit communications satellites and robotic arms for spacecraft. It also operates Earth observation satellites and sells geointelligence, the analysis of satellite imagery and other data, to government and commercial customers.
CSG built the stake through a share forward agreed with Morgan Stanley Europe in July. Under a share forward, the buyer agrees to take delivery of shares at a later date and carries the gain or loss on them in the meantime without owning them. The contract could be settled only in cash until Canada cleared the purchase under the Investment Canada Act, its foreign investment review law, on 8 October. CSG paid from working capital, the filing said.
CSG said in a statement that it intended to be a long-term strategic shareholder. It listed possible co-operation with MDA, including co-investing in manufacturing or assembly sites in Europe, joint acquisitions and introductions to CSG’s customers. In the filing, CSG also reserved the right to make proposals on MDA’s board, its capital allocation, or a sale of all or part of the company.
The stake is CSG’s biggest step into space so far. The group’s Tech Horizons venture fund previously took smaller stakes in UK start-up SatVu and German start-up Atmos Space Cargo. CSG has also hired a three-person space team that includes Ladislav Stahl, a former NATO space adviser.
CSG listed on Euronext Amsterdam in January, raising €3.8bn in Europe’s largest defence IPO. Entering the market in January with an offer price of €25, the shares have spent much of the year falling, trading at €15 yesterday.
