The purchase of an aerospace software business by Rocket Lab is among a series of deals the company is considering, which has been made possible in part by its decision to go public. Advanced Solutions, Inc. (ASI), which is a Colorado-centered engineering firm that produces flight software, simulation systems, and guidance, navigation, and control (GNC) systems, was purchased by Rocket Lab on October 12th. Rocket Lab will pay $40 million for ASI, plus a bonus of up to $5.5 million based on the company’s financial performance in the year 2021.
Under the supervision of ASI’s founder and CEO, John Cuseo, ASI and its staff of almost 60 people will continue in Colorado, servicing existing clients while also integrating its skills more tightly into Rocket Lab’s broader business. “By joining forces, we will continue serving our clients and advance in our areas of competence, such as space software and GNC,” Cuseo stated in a statement. “We look forward to supporting satellite components, Photon missions, and space as well as ground software as part of Rocket Lab’s Space Systems company.”
Peter Beck, the CEO of Rocket Lab, stated in an interview on October 13 that his firm was familiar with ASI since it was a customer. “We utilized their software in several of the projects,” he stated, adding that the two companies’ “chemistry was right.” “Software is a very difficult niche to fill,” he remarked, noting that there are few “pure play” software companies in the aircraft industry. “Having 50 folks with a lot of complex program experience made this a no-brainer.”
Rocket Lab’s acquisition of ASI was not the company’s first. Sinclair Interplanetary, a maker of smallsat components like reaction wheels, was bought in the spring of 2020. The sale is the first since Rocket Lab became public in August after merging with Vector Acquisition Corp., which is a special purpose acquisition firm.
One of the goals why Rocket Lab company went public, according to Beck, was to make purchases like these simpler. “Would it have been possible to achieve this as a private company?” “Probably,” Beck responded, citing the example of Sinclair. “However, being a publicly-traded company makes it much easier to do these deals.”
Other firms with similar products or technology to its launch vehicle as well as spaceship missions have been discussed by Beck and other company leaders. In the September earnings call, Rocket Lab’s chief financial officer, Adam Spice, said the business was considering approximately a half-dozen potential mergers.
“There are a lot of founder-controlled mom-and-pop bootstrapped businesses,” Spice remarked. “They’re really beautiful enterprises that are quite integratable, and they’re digestible from that standpoint.” They’ve also placed a premium on profitability, ensuring that you don’t end up with venture-backed cash-burning businesses. We’re seeing a lot of possibilities.”