Thornton-based spy satellite company Space Imaging LLC has agreed to sell its assets to Orbimage Holdings Inc. in Dulles, Va. for $58.5 million.
Many of Space Imaging’s 175 employees could stay in Thornton, such as those in satellite operations. Some will likely move to Dulles, such as sales and marketing employees.
“We’re in a growth mode,” said Orbimage chief executive Matthew O’Connell. “This gives us a chance to fill a lot of the holes we have. We get a terrific talent pool.”
Some Space Imaging employees may be laid off, but O’Connell said it’s too early to tell how many and no layoffs are planned for the immediate future.
Space Imaging was a pioneer in the industry, launching the world’s first commercial spy satellite in 1999. It has the largest market share of the three companies that dominate the industry. Longmont-based DigitalGlobe fills the No. 2 slot. Orbimage comes in at No. 3.
Nearly three years ago, Lockheed Martin and Raytheon wrote off more than $300 million in losses on their investments in Space Imaging and refused to put more money into the company.
Last September Space Imaging lost to Orbimage a critical government spy satellite contract called NextView, setting the stage for Space Imaging’s demise. The company’s Ikonos satellite is expected to deteriorate around 2007 and without a new contract it has no replacement satellite to serve as the foundation for its business.
Orbimage has not been without its own problems. It emerged from Chapter 11 bankruptcy protection in 2003. In 2004, Orbimage had $31 million in revenues and a net loss of $24.7 million. Orbimage shares fell 10.7 percent to $12.50 today.
A combined Space Imaging and Orbimage is expected to yield a combined market share of more than 50 percent, which could make DigitalGlobe a distant No. 2 in the industry.
The sale price in the deal will be reduced by amounts paid by Space Imaging on debt and other adjustments. Space Imaging will use proceeds from the sale to repay debt to Lockheed and Raytheon. Lockheed and Raytheon will recover only a portion of their investment with the sale.
The deal is subject to regulatory approvals, primarily from the National Ocean & Atmospheric Administration and the Federal Communications Commission, for a close of the deal by Dec. 31.
Staff writer Kelly Yamanouchi can be reached at kyamanouchi@denverpost.com or 303-820-1488.
