AE Industrial Partners (AEI), a private equity firm based in Boca Raton, Fla., acquired a controlling majority stake in Firefly Aerospace from Noosphere Ventures, which is based in Mountain View, Calif., in March of 2022. At the time of the transaction, Firefly was valued at more than $1 billion.

Government Request

Firefly faced challenges in late 2021 after the U.S. government asked Noosphere, the company’s largest shareholder, to divest its stake for national security reasons leaving the Cedar Park, Texas-based aerospace company’s future uncertain. Ukrainian tech entrepreneur Max Polyakov founded Noosphere, which rescued Firefly from bankruptcy in 2017.

Firefly is one of just a handful of companies competing in the global small launch market, according to AEI. If Firefly had been unable to quickly secure funding from a government approved investor, the company could have been forced to shut down.

AE Industrial saw a unique opportunity to step in and develop a differentiated, trusted, small and mid-sized space launch and transportation platform dedicated to addressing growing market demand from both the commercial and defense community. The majority stake was acquired via two concurrent transactions: a secondary transaction acquiring the existing majority shareholder’s stake in the company and an AE Industrial-led $75 million bridge Series B round valuing Firefly at more than $1 billion.

Looking Up

Timing was tight, as without a new investor Firefly would have been unable to lock in the second launch of its Alpha rocket planned for late 2022. AEI quickly delivered a solution to the company, Firefly shareholders and the U.S. government that addressed all outstanding national security concerns and provided a needed cash infusion. It also ensured that Firefly would experience limited business disruption and retain key employees. Firefly’s Alpha rocket successfully reached orbit on October 1, 2022.

For more Deals of the Year coverage, see Mergers and Acquisitions Names the 2023 Middle-Market Deals of the Year.