Czech defense company CSG Group announced it has acquired a 9.5% stake in Canadian space technology company MDA Space Ltd. (TSX/ NYSE: MDA), becoming its largest shareholder, as part of a push to build out a space business.
CSG said on Tuesday it bought the 9.5% stake in MDA Space Ltd., the builder of Canadaarm2 for the International Space Station. MDA develops space robotics and satellite systems and is listed on both the Toronto Stock Exchange and the New York Stock Exchange.
Based on MDA's closing price of C$40.18 on Monday, the stake is worth about C$620 million (US$434.1 million). CSG did not disclose the specific financial details of the investment.
CSG said the investment is part of its long-term strategy to expand into the space sector on top of its existing defense and aviation businesses. CSG said the two companies may pursue various forms of cooperation, including jointly funding manufacturing or assembly facilities in Europe, carrying out strategic acquisitions together, and helping MDA expand internationally.
"We want to be a long-term strategic shareholder, and we believe MDA Space and CSG Group have enormous potential for synergistic growth," said Michal Strnad, chairman of CSG Group. MDA Chief Executive Mike Greenley said the company welcomes CSG's investment.
The investment comes against the backdrop of traditional defense companies expanding into space, betting on orbit-related technologies. A record-breaking initial public offering by a company earlier also underscored investor enthusiasm for this fast-growing sector.
European defense contractors are actively growing their space businesses. Last month, Sweden's Saab Group signed framework agreements with space companies SSC Space and OHB as well as telecom equipment maker Ericsson to expand its footprint in space systems. Saab said that as space becomes increasingly important to strategic and military operations, it wants to play a bigger role in the field.
Other defense companies are also treating space as a growth engine. A joint venture formed by France's Thales Group and Italy's Leonardo generated revenue of 2.36 billion euros (US$2.63 billion) last year and recently won a 500 million euro order to supply payload equipment for 330 low-Earth-orbit satellites. Meanwhile, Germany's Rheinmetall Group set up a joint venture last year with satellite operator ICEYE and won a 1.7 billion euro contract to provide space reconnaissance data to the German armed forces.
Jefferies investment bank analysts said in a research note that MDA's business is highly dependent on its home market in Canada, with only 5% of sales revenue coming from Europe in 2025, so expanding international business would benefit both companies.
CSG also said it has set up a dedicated space business team to advance work in the field. The group appointed former NATO space adviser Ladislav Shtal as head of space strategy and technology, and named Filip Kozyan as director of space business responsible for corporate development.
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