Maxar Technologies Inc. (MAXR - Free Report) yesterday announced that it has completed the divestment of MDA to a consortium led by Toronto-based investment firm Northern Private Capital for C$1 billion. MDA is Canada’s largest space technology developer and manufacturer, with more than 1,900 employees across the country. Net proceeds from the transaction are expected to be about $729 million. Maxar’s shares moved up 7.2% in the last trading session.
The Westminster, CO-based company has been making progress on its near-term priorities for sustained top- and bottom-line growth. This includes efforts to reduce leverage levels, re-engineer the Space Solutions business as well as position the Imagery and Services businesses for long-term growth. It is focused on creating a leaner organization and reducing costs, while improving capital structure to prioritize investments in its core areas of Earth Intelligence and Space Infrastructure.
The company’s growth strategy is focused on providing leading capabilities in Earth Intelligence and Space Infrastructure segments. This involves geospatial data, data analytics as well as spacecraft and robotics that are aligned with the priorities of its government and commercial customers. The MDA transaction, together with the recently-completed sale of real estate in Palo Alto, reduces Maxar’s total net debt by almost $1 billion and significantly improves the company’s leverage ratio.
Maxar has long-standing relationships with allied governments and a diverse set of companies. It has multi-year service contracts for data and data analytics in its Earth Intelligence segment as well as manufacturing and service contracts in its Space Infrastructure segment. More than 50 allied nations depend on Maxar’s products and services to augment their intelligence missions.
Maxar is also developing spacecraft and robotics for NASA that will demonstrate in-orbit satellite refueling and assembly as well as improve pollution monitoring in North America. This will also explore an all-metal asteroid and provide power and propulsion for the Gateway spacecraft that will enable a sustainable human deep-space presence in collaboration with international partners.
The company is currently assessing the U.S. Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law on Mar 27, which provides support for the resiliency of the defense industrial base and critical infrastructure industries. Shares of Maxar have surged 136.9% against 23.5% decline of the industry in the past year.
Maxar currently sports a Zacks Rank #1 (Strong Buy) and has a VGM Score of A.
A few other top-ranked stocks in the broader industry include Ooma, Inc. (OOMA - Free Report) , Viavi Solutions Inc. (VIAV - Free Report) and Plantronics, Inc. (PLT - Free Report) . While Ooma sports a Zacks Rank #1, Viavi and Plantronics carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ooma has a trailing four-quarter positive earnings surprise of 124%, on average.
Viavi has a trailing four-quarter positive earnings surprise of 11.7%, on average. The company’s earnings beat the Zacks Consensus Estimate in three of the last four quarters.
Plantronics has a trailing four-quarter positive earnings surprise of 27.7%, on average. The company’s earnings topped the consensus estimate in three of the last four quarters.
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