Satcom small cap SatixFy soars 64% on news of being acquired by MDA Space

SatixFy, an Israel-based but U.S.-listed small company that specializes in vertically integrated satellite communication systems and ground terminal chips, is being acquired at a significant premium by its long-time partner, Canada’s MDA Space, whose technology is used by Eutelsat. SatixFy shares skyrocketed 64% on the news yesterday.

Yesterday, April 1, SatixFy soared 64% on the New York Stock Exchange to $1.97 per share, its highest close since December.

The gains had started in premarket trading yesterday after Canada’s MDA Space announced it had acquired the Israeli company. According to the press release, the deal values SatixFy at $193 million, or $2.10 per share, representing a 75% premium to the stock’s closing price the day before, March 31, and a 52% premium to its 30-day volume-weighted average price. MDA also agreed to retire SatixFy’s debt of about $76 million, bringing the total value of the deal to around $269 million.

It is expected to close in the third quarter. Though it has been approved by the boards of both companies, it still requires approval by regulators and SatixFy shareholders, with a vote expected in the second quarter.

SatixFy has 45 days to solicit competing offers from other potential buyers.

SatixFy develops next-generation satellite space and ground communications systems, including multi-beam digital space antennas, flat-panel user terminals, and modems based on powerful in-house designed chipsets.

According to MDA, SatixFy’s technology provides connectivity through radiation-hardened digital beamformers, enabling the generation of hundreds of beams, which significantly improves satellite performance while reducing costs.

MDA expects the acquisition to enhance its end-to-end satellite systems offering as demand for next-generation digital satellite communications grows.

“The global market transitions from analog to digital satellite technology,” MDA CEO Mike Greenley was quoted as saying in the press release.

MDA conducts Earth and space monitoring for corporate and government clients and provides technologies and services for the space industry. For example, its solutions are used in the OneWeb satellites of Eutelsat, which, like Elon Musk’s Starlink, provides satellite internet access. MDA also has an agreement with Canadian satellite internet provider Telesat.

SatixFy and MDA have been collaborating since 2023. This year alone, the companies announced $10 million worth of new contracts, on top of the $10 million in agreements signed in the fourth quarter, notes SatixFy CEO Nir Barkan, as quoted in the company’s 2024 financials (which showed a 92% year-over-year increase in revenue to $20.6 million).

SatixFy stock is up about 29% for the year to date and almost 200% over the last 12 months. 

According to MarketWatch, the lone analyst who covers SatixFy has a “buy” recommendation, with a target price of $3 per share, 52% above the closing price yesterday.