Author Topic: Aerojet Rocketdyne and ULA: A Match Made in Heaven?  (Read 299 times)

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Offline Elderberry

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Aerojet Rocketdyne and ULA: A Match Made in Heaven?
« on: December 02, 2022, 02:00:11 am »
The Globe and Mail 12/1/2022

In 2015, Aerojet Rocketdyne(NYSE: AJRD) had a problem. Actually, it had a couple of problems, but the most obvious one was this: In five years' time, Aerojet had succeeded in doubling its revenues to $1.7 billion. But while Aerojet's sales soared, its profits soured.

2015 was Aerojet's second money-losing year in a row -- its third year of losing money out of the previous five. And while business was about to get better (Aerojet would only lose money in one of the succeeding seven years), Aerojet didn't know that yet.

Worse, as Aerojet's numbers moved in the wrong direction, a new rival in the form of Jeff Bezos's Blue Origin space company was moving in on Aerojet's engine business, bidding to build the new main engine for Aerojet customer United Launch Alliance (ULA). If that happened, Aerojet wouldn't be able to sell ULA its new AR1 rocket engine!

Ultimately, Aerojet would, in fact, lose this bid to Blue Origin -- but again, Aerojet didn't know that yet. And not knowing which way the ULA decision would land, Aerojet came up with a plan: It would offer to buy ULA for $2 billion, thus ensuring ULA would buy its AR1 engine instead of Blue Origin's BE-4 engine.
Aerojet fails -- and then Lockheed does, too

As it turned out, Aerojet's bid to buy ULA failed, too, when Boeing(NYSE: BA) -- which owned 50% of ULA -- refused to sell. (As Boeing Space president Craig Cooning put it, he didn't "want to have anything to do with" a merger of ULA and Aerojet).

That was true seven years ago, but is it true today?

More: https://www.theglobeandmail.com/investing/markets/stocks/LMT-N/pressreleases/12133993/aerojet-rocketdyne-and-ula-a-match-made-in-heaven/