Publicly listed German space technology company OHB has announced plans to raise up to €510.7 million by issuing approximately 1.7 million new shares. The company plans to use the proceeds primarily to bolster its production capacity. However, it will also fund planned acquisitions, investments in launch vehicles, and “future tangible projects.”
In addition to its significant satellite manufacturing business, OHB is involved in two launch vehicle programmes through its subsidiary MT Aerospace, a major supplier to the Ariane 6 programme, and its stake in Rocket Factory Augsburg. The company is also involved in several future space infrastructure projects, including its recently established European Moonport Company and Dassault’s VORTEX spaceplane initiative.
OHB announced its intention to raise up to €510.7 million through the issuance of new shares on 22 June, pricing them at €300 each, representing a 26% discount to the previous trading day’s closing price of €405.50. On 24 June, the company announced that it had sold 1.6 million of the planned 1.7 million new shares, raising approximately €482 million. The remaining 97,000 shares will be offered to existing minority shareholders, potentially increasing the total raised to the planned €510.7 million. The sale of this second tranche is expected to be completed no later than 8 July.
Along with its 24 June update, OHB CEO Marco Fuchs touted the “very strong interest” in the sale as evidence that the company sits at the centre of Europe’s expanding space sector.
“The very strong interest from a diverse set of investors, including domestic investors, thematic sector funds, and blue-chip global funds alike, confirms that OHB is at the center of Europe’s booming space industry,” said Fuchs. “With this reinforcement of our financial base, we are ideally positioned for the next phase of sustained growth for OHB.”
While the company did not specify how the new capital would be allocated across the four main objectives in its 22 June announcement, a graph in a Capital Markets Update presented by the company in May appears to break down the allocation.
Based on the relative sizes of the boxes in the graphic, European Spaceflight estimates that approximately 41% of the funding will go towards industrialisation to fuel the company’s growth, making it the largest slice by a significant margin. The next-largest share, 23%, will go towards mergers and acquisitions. Launch vehicles and future programmes will receive 14% and 13%, respectively. The remaining 8% will go towards “general corporate purposes.”
The Capital Markets Update also provides insight into which launch programmes the funding will support, a detail absent from the 22 June announcement. Specifically, the presentation stated that the funding would support Rocket Factory Augsburg by providing co-funding for its participation in the European Space Agency’s European Launcher Challenge. If the estimated 14% allocation holds, approximately €71.5 million of the proceeds would go to RFA.
In addition to the new shares issued by OHB, KKR-linked Orchid Lux HoldCo sold up to 1.39 million of its existing shares in the company. The sale is expected to represent approximately 25% of Orchid Lux’s stake in the company and will generate around €418.4 million. When compared with KKR’s original investment of just €242 million to acquire its 28.6% stake in OHB, the sale will allow the firm to recoup its initial investment and receive an additional €176 million while still retaining a stake of approximately 20% in the company.
While both the issuance of new shares and Orchid Lux HoldCo’s reduction of its stake in the company have brought new institutional investors into the fold, the Fuchs family will retain its controlling interest, with its stake remaining above 60%.
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