The Vancouver tech company developing the first ultra high-definition camera for outer space is locking down even more out-of-this-world assets.
UrtheCast (TSX:UR) has agreed to pay €74 million (C$102 million) for Spain’s Deimos Imaging in a deal expected to close this August.
The acquisition from Deimos’ parent, Elecnor, includes two satellites and archives that have collected images across 6.5 million square kilometres of Earth.
While much of UrtheCast’s own imagery spans North America, Asia and the Middle East, the Deimos satellites have been collecting images primarily from Western Europe and Latin America.
“We think it’s a very, very complimentary distribution and market footprint,” UrtheCast president Wade Larson told investors on a June 22 conference call after the deal was announced.
Half the deal is being financed through debt while the remaining C$50 million is being covered by a group of underwriters led by investment dealer Raymond James Ltd.
Most of Deimos’ 50 employees are focused on operations while just a small team is focused on sales and marketing.
The Deimos 1 satellite launched in 2009 and is considered to be about halfway through its lifespan.
The Deimos 2, meanwhile, launched late last year and the company expects the bulk of revenue from the acquisitions to come from the newer satellite.
UrtheCast estimated the satellites would bring in revenue of C$20-25 million by the end of 2016.
Although losses at the early stage company totalled US$5.8 million in 2014, the camera-maker posted its first-ever quarterly profit in the fourth quarter (US$6 million) after signing a US$65-million contract with an undisclosed client last November.
“The morale in the company right now is the highest it’s ever been,” Larson said.
“We feel very, very confident about our future here going forward.”
