L3Harris Technologies has announced the sale of a majority stake in its civilian space propulsion unit to private equity firm AE Industrial Partners for approximately $845 million. This strategic decision underscores L3Harris’s intention to concentrate more on the military space sector, aligning its operations with the goals of the Department of Defense.
In a statement, Chairman and CEO Christopher Kubasik emphasized L3Harris’s commitment to the Department of Defense’s vision. “L3Harris is strongly committed to the Department of War’s vision for a faster, more agile defense industrial base while remaining laser-focused on driving value for our shareholders and customers,” he said. The transaction includes the sale of a 60 percent share in the space propulsion business, while L3Harris will retain a 40 percent ownership stake.
The propulsion unit is known for its involvement in technologies supporting NASA and civil space initiatives. Its notable products include nuclear power systems aimed at future lunar and Martian missions, as well as the RL10 engine, which powers the upper stage of the United Launch Alliance’s Vulcan heavy-lifter rocket. Notably, the sale does not encompass the RS-25 rocket engine business, which serves as the primary propulsion system for NASA’s Space Launch System, integral to crewed missions under the Artemis program.
AE Industrial Partners, which has a history of investing in commercial space ventures such as York Space Systems and Firefly, plans to rebrand the acquired entity as Rocketdyne. This name pays homage to the firm’s legacy in space propulsion technology, tracing back to its origins when it was founded as a subsidiary of North American Aviation in 1955.
“This transaction will not only modernize and give new life to a pioneer of space and national defense technology,” stated Kirk Konert, managing partner at AE Industrial, “but it will also create a new hybrid model of agile collaboration, combining the stability and power of a national defense prime with the innovation of a specialized investor.”
Konert highlighted plans to enhance the production of the RL10 engine by integrating modern manufacturing practices. This approach aims to bolster efficiency and innovation within the newly formed Rocketdyne, ensuring it remains at the forefront of space propulsion advancements.
L3Harris’s recent actions reflect a broader trend in the defense industry, where companies are increasingly prioritizing military contracts and technologies. By divesting from civilian operations, L3Harris positions itself to better serve the evolving needs of national defense, while also generating significant capital through this transaction. As the landscape of space exploration and defense continues to change, L3Harris’s strategic focus may well define its future trajectory in the military sector.