The UK’s space sector is bound for an explosion in mergers and acquisitions (M&A) next year – with London “uniquely well-placed” for a leading role in the forecasted frenzy.
Managing associate of Linklaters technology practice, Katie Williams told City A.M., that an increase in M&A activity is likely, with banks and other financiers expected to open up the fiscal floodgates to the sector in the months ahead.
“London’s role as a global centre for the finance and industry providers that support the space industry, as well as being the UK headquarters of a number of the governmental bodies responsible for space policy development and regulation, means the city has a real and current ability to play a significant part in the growth and advancement of the space sector – both in the UK and elsewhere,” she said.
“Businesses are already starting to think more strategically about the commercial opportunities available in space,” Williams continued, with many of the world’s largest technology companies already investing heavily in the development of satellite technology.
The raft of industry promises that are anticipated to be realised next year – with the first-ever scheduled launches expected to take off from UK soil – will inevitably push more finance behind the industry and spur more acquisitions.
While the decarbonisation push has encouraged a dramatic increase of investment into the sector, Williams noted, and will act as a key driver in next year’s M&A surge.
“The dramatic increase of investment into the sector has fuelled innovative inventions, many of are critical in monitoring climate change and agricultural control and production,” said Williams. “Particularly as earth observation allows us to better understand climate change and guides crucial decision-making in our efforts to achieve net-zero.”
London-listed Seraphim Space Investment Trust on Friday completed two acquisitions for satellite technology company ICEYE and orbital transport firm D-Orbit – which follow a number of deals over the past 12 months.
The deals, worth over £28m combined, signal the loaded momentum of M&A going into the new year.
“2021 has been a new era for the new space industry,” CEO of Seraphim Space, Mark Boggett told City A.M. “Capital markets supported a stream of SpaceTech10 businesses going public through listings including ArQit Quantum, Spire Global, Rocket Labs, Blacksky and Planet followed by a slew of M&A transactions as these companies hoovered up smaller competitors.”
Private sector investment hit record heights this year, with $7.7bn being pumped into the blossoming industry in the first nine months of this year alone, according to Seraphim’s Space Index, topping yet another record figure in 2020.
And this trend shows no signs of slowing, Boggett explained, as climate change and the development of space technologies become closely interlinked.
“This trajectory will only increase in 2022, reaching close to $10bn next year as investor appetite reaches beyond the near-term commercial opportunities towards next-generation space infrastructure projects,” the space-tech boss concluded.