It wasn't the ideal start to the year for Firefly Aerospace. The private space company, which already had some lofty goals for 2022, quickly saw things turn south when its majority shareholder was forced to sell off his assets in the company.
Months after being recognized as one of the brightest stars in the private aerospace field, Firefly found itself almost bankrupt. However, the company has now been given a new lease of hope and is ready to take to the skies again.
New Investments Bring Much-Needed Hope
In March, Firefly Aerospace announced that it had reached a life-saving deal with AE Industrial Partners (AEI) - a private equity firm based out of Boca Raton, Florida. The company made the announcement in a filing with the Federal Communications Commission (FCC), confirming that AEI had purchased a massive stake in the company.
Firefly's announcement added that the private equity investment deal comes with the option of taking the company public via a special purpose acquisition vehicle. The announcement also adds that Firefly would be looking to launch its second Alpha rocket his spring from the Vandenberg Air Force Base in California. The company appears to be willing to move on and get its 2022 bacon track.
Firefly has truly been through quite a lot. The company was heralded as one of the most promising names in the private aerospace industry all through 2021, with many tipping it to provide some helpful competition and collaborations with big names like Blue Origin or SpaceX. Then, all of that changed when its majority shareholder was forced out.
A Rocky Start To The Year
In January, Max Polyakov, Firefly's majority shareholder, got a letter asking him to sell his stake in the company. The letter was sent by the Committee on Foreign Investment in the U.S. (CIFIUS) - an arm of the U.S. government that oversees the national security impacts of foreign investments in the country. Polyakov, a Ukrainian, was deemed a possible national security threat thanks to the conflict between Russia and Ukraine.
At the time, the Russian forces hadn't even begun their full-scale invasion of Ukraine. However, experts at CIFIUS believed that an attack was imminent, and Polyakv's ownership of Firefly could be detrimental to national security. So, they took preemptive steps and ordered Noosphere Ventures - Polyakov investment firm - to sell its 50 percent stake in Firefly.
Polyakov has been more than instrumental in bringing Firefly to where it is today. The entrepreneur took notice of the floundering aerospace company in 2017, and he made a massive investment through Noosphere. Despite having invested over $200 million in Firefly and being an integral part of the company's running, Polyakov was forced to sell his stake and step down from the company's board.
Ready To Move Forward
In February, Polyakov wrote a scathing post on Facebook, criticizing CIFIUS and the United States Air Force, and other agencies for betraying him. The entrepreneur stated that he was being forced to give up his stake in Firefly, which he sold to company chief executive Tom Markkusic for $1. However, the sale transaction was, in fact, made between Noosphere and AEI, and it was reportedly worth at least $101 million.
In the recent FCC filing, Firefly gave even more details about the transaction. Besides purchasing all of Noosphere's stake, AEI has also invested $75 million through direct equity investment in the company. This was possible through a Series B preferred equity round.
Thanks to all of this, AEI will now own over 50 percent equity stake in Firefly Aerospace. The company will also have a higher voting interest percentage over other investors and will be able to appoint most of the members of the private aerospace outfit's board.
Firefly is now looking to the future with a new investor on board. Markusic told CNBC recently that they are working towards the Alpha rocket launch, saying that they've been able to gain access to their facilities. So, all systems are on deck for the next launch at the moment. As Markusic explained, they're looking at sometime in May for the Alpha rocket launch, and they've begun moving the rocket from their headquarters in Texas to California.
It goes without saying that success with this launch will be critical for Firefly's future. The company has already spent a lot of time dealing with the fallout of the Polyakov sale, and a successful launch will show that it's still got what it takes to compete on the biggest stage.