KKR & Co. plans to take private the German space and technology company OHB SE alongside the founding family as competition in the satellite sector heats up.
Investors will received €44 ($48.33) for every OHB share, the company said Monday. That’s 38% higher than the closing price Friday. KKR also agreed to participate in a plan to raise OHB’s capital by 10%.
The news confirms an earlier Bloomberg report that the US buyout firm was close to announcing the deal.
A group of Fuchs family shareholders, who together own about 70% of the company, won’t sell any shares.
Shares of OHB are flat this year, giving it a market value of about €563 million.
OHB has built satellites and products for Europe’s Galileo navigation system, weather forecasting and the International Space Station. It’s also supplied technology to help search for life on Mars, track comets and support rocket launches, according to OHB’s website.
Family Company
The company’s customers include German and European governments. Given the sensitivities around space systems, aerospace and digital businesses, which have gained in importance amid Russia’s war with Ukraine, any deal could draw political scrutiny.
OHB said in its most-recent annual report that it is evaluating potential market access strategies for the Middle East and North America and has held discussions with potential partners in these regions.
OHB traces its roots back to a small workshop with five employees repairing hydraulic systems for the German armed forces. In 1981, businesswoman Christa Fuchs took over the firm, eventually roping in other members of her family and shifting its focus to the space industry.
Foreign investors have been flocking to family-owned German industrials businesses. In April, century-old manufacturer Viessmann agreed to sell most of its business to US air conditioner maker Carrier Global Corp. for about €12 billion. And a month later, Messer SE secured an investment from Singapore sovereign fund GIC Pte that values the industrial gas maker at more than €12 billion including debt.
A take private of OHB would be a bright spot in an otherwise subdued buyout market that’s been hampered by high financing costs and disagreements over valuations. The value of private equity acquisitions is down more than 50% to roughly $287 billion in 2023, data compiled by Bloomberg show. Still, KKR has been active in recent weeks, agreeing July 21 to buy US specialty chemicals maker Chase Corp. for $1.3 billion.
Space Launches
The transaction is the latest attempted deal in the satellite industry, which requires significant investment to build and launch spacecraft. Plans by billionaire Elon Musk and fellow tycoon Jeff Bezos to launch thousands of spacecraft into lower orbits and blanket the earth in fast broadband have pushed the traditional satellite industry into mergers.
In November 2021, California-based Viasat Inc. announced it would acquire Britain’s Inmarsat Group Holdings Ltd., while France’s Eutelsat Communications SA agreed in July last year to combine with UK-backed low-earth orbit venture OneWeb Ltd. Intelsat SA and SES SA were in merger discussions earlier this year to create a satellite giant before talks collapsed.
KKR has a track record in the satellite industry through its $3.5 billion acquisition of PanAmSat almost two decades ago. It also has experience in German aerospace, having listed plane engine maker MTU Aero Engines AG in 2005.
--With assistance from Dani Burger and Swetha Gopinath.
Author: Aaron Kirchfeld, Jan-Henrik Förster and Eyk Henning
