MDA Space to acquire CLS in €567M Earth observation deal

MDA Space Ltd. has entered a firm offer to acquire a majority stake in CLS, a French provider of AI-driven Earth observation and satellite Internet-of-Things services, for about €567 million ($920 million) in cash, creating one of the largest space-based geointelligence businesses globally.

"The bringing together of MDA Space and CLS is a unique opportunity to create a growing, profitable, highly competitive and vertically integrated geospatial services business," said Mike Greenley, chief executive officer of MDA Space, in a statement Wednesday.

The Toronto-based company will acquire an approximately 70% interest in CLS from the shareholders of its parent company. The French space agency CNES will retain a roughly 30% stake. CLS, founded in 1986 as a CNES subsidiary, is expected to generate about €286 million in revenue this year, representing a 22% compound annual growth rate since 2023. The company serves more than 14,000 customers across approximately 150 countries and employs about 1,200 people at 40 sites worldwide.

The acquisition positions MDA Space to compete more aggressively in the fast-growing market for satellite data and analytics, where demand from both government and commercial customers has surged. CLS processes data from nearly 200,000 beacons each month and analyzes about 20,000 radar and optical satellite images annually for applications including fisheries management, maritime surveillance, environmental monitoring, and energy infrastructure tracking. The deal is expected to double MDA Space's recurring revenue stream and be accretive to adjusted earnings before interest, taxes, depreciation, and amortization and adjusted earnings per share within the first year of ownership. CLS's adjusted EBITDA margins are in line with MDA Space's full-year outlook of 18% to 20%.

MDA Space, a robotics, satellite systems, and geointelligence company with more than 4,000 employees and a 55-year history, said the acquisition will add about 100 sales professionals to its team and accelerate global distribution of its MDA CHORUS satellite constellation. The company expects to remain within its target leverage range of 1.5x to 2.5x net debt to adjusted EBITDA following the CLS acquisition and the previously announced purchase of Blue Canyon Technologies. Moelis & Co. advised MDA Space on the transaction, while Rothschild & Co. advised CLS's shareholders. Financing commitments were secured from BMO Capital Markets, RBC Capital Markets, and Scotiabank. The deal requires regulatory approvals and consultation with employee representative bodies in France, with closing expected by the end of 2026 or early 2027.

This article is for informational purposes only and does not constitute investment advice.