Boeing [BA] has completed its acquisition of Millennium Space Systems, providing an expansion of its existing satellite portfolio to compete for growing military interest in developing satellites faster at a much lower cost.
Under the acquisition, Millennium will retain an independent operating model as a subsidiary within Boeing’s Phantom Works division. A representative for Boeing has confirmed that the company does not anticipate any executive leadership or location changes for Millennium after closing the acquisition. Millennium CEO Stan Dubyn will report to Boeing Phantom Works Vice President and General Manager Mark Cherry amid the changes.
Moving forward the two companies will focus on providing advanced small satellite technologies and solutions. Boeing declined a request for comment on what those technologies will be, other than to note that its Phantom Works division “pursues both government and commercial opportunities in the small satellite sector in the U.S. and internationally.”
Carolyn Belle, a senior analyst for satellite market research and consulting company Northern Sky Research (NSR), told Defense Daily that the acquisition can be viewed as a move to extend Boeing’s traditional business of supplying satellite technologies and applications for defense and intelligence agencies into small satellites. Boeing does have some previous experience supplying small satellites including a $5 million contract awarded by the U.S. Air Force in 2011 to develop two experimental cubesats designed for carrying space weather payloads.
“More recently, there’s been increased U.S. government and military attention to developing small satellites that can be built faster at a lower cost. A number of Air Force officials for example have discussed taking some of the capabilities traditionally packed into one larger satellite and spreading them across smaller platforms. That provides the option of distributing risk across spacecraft—if you lose one it does not have as significant of an impact on your operations,” Belle said.
Small satellites can also provide increased coverage of a specific area. A collection of several small reconnaissance satellites can provide faster satellite communications capabilities for a given area when compared to one large satellite focusing on many different areas, according to Belle.
Closing the acquisition also makes Boeing the latest prime aerospace and defense contractor making investments toward growing their small satellite portfolio.
In March, Thales Alenia Space and Telespazio formed a joint venture with Seattle-based Spaceflight Industries aimed at manufacturing 20 small satellites for a new “BlackSky” constellation. Airbus has a joint venture with OneWeb called “OneWeb Satellites” that started production last year of what will eventually become a constellation of 900 mini communications satellites. In August, Lockheed Martin [LMT] led the closing of a $6 million funding round for Terran Orbital, a California-based startup that supplies end-to-end nanosatellite services and solutions to U.S. government agencies and commercial enterprises.
Adding Millennium Space Systems can provide Boeing with the opportunity to catch up to the competition.
“Boeing has a lot of existing government relationships, they know how to do the contracts and identify how small satellites can work alongside some of the larger satellites they’ve built, making those two pieces come together,” Belle said.