Canada’s MDA Space pushing for more global defence, aerospace contracts in sovereign-dominated industries

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“Any risk to their three big customers could be a potential risk,” Gupta said.

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For example, Amazon.com Inc. in April announced it had finalized a deal to acquire Globalstar. MDA’s contract with Globalstar is set to continue, but it “might not necessarily have follow-on orders,” Thanos Moschopoulos, an analyst at BMO Capital Markets Corp., said.

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Last year, MDA lost a US$1.8-billion contract with EchoStar Corp. after the U.S.-based telecommunications company abruptly axed its plans to develop a space-based satellite network and sold its licences to Space Exploration Technologies Corp. (SpaceX) for US$17 billion, instead.

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“It’s not fun when it happens and it’s a very rare event,” Greenley said of the scrapped deal.

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Seth Seifman, an analyst at JPMorgan Chase & Co., said sales from MDA’s key contracts will continue to grow, but will largely wrap up at the end of 2027, so it must win more contracts since its backlog has declined.

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“Competition is intense and customer plans can change or experience delays,” he said in a note in April.

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Greenley said MDA is aiming to acquire “established companies” in the U.S. and Europe, though no acquisitions are close to completion yet. He said MDA’s US$300-million initial public offering in March on the New York Stock Exchange, its second IPO following its 2021 Toronto debut, will prepare it for upcoming M&As and help it access American investors and deeper capital pools.

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“When we make acquisitions in the U.S. or elsewhere in the future, and we are holding stock as currency, we can use shares or cash, which is helpful,” he said.

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At the same time, operating the world’s first large-scale digital satellite plant will give MDA a production, export and sovereignty edge, analysts say. This month, the company officially opened a $350-million satellite plant in Montreal that will annually produce 400 satellites.

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Moschopoulos said governments have realized the importance of having their own sovereign satellite infrastructure and are hesitant to trust third-party operators such as SpaceX, which provides an opening to MDA.

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“MDA … is certainly under consideration for some of those (contracts). That would be a big chunk of its pipeline,” he said, pointing to potential agreements with countries such as Japan, Taiwan and Germany.

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The company recently signed a memorandum of understanding with South Korean conglomerate Hanwha Corp. to develop military satellites for South Korea.

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In May, it finalized nine early contracts and received 32 letters of interest for data from its satellite constellation to be launched later this year. The agreements came from energy, natural resources and maritime industry partners across regions such as North America, Europe and Asia-Pacific.

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MDA also supplies the five largest U.S. defence contractors with critical satellite and space equipment such as antennas and electronic subsystems made in its Montreal factory.

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In January, it was shortlisted to compete for work on the U.S. Missile Defence Agency’s SHIELD program, part of U.S. President Donald Trump’s Golden Dome initiative to defend the U.S. against intercontinental ballistic missile attacks.

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Trump last week increased cost estimates for the project to US$1.2 trillion, allocating US$172 billion for satellites alone.

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Greenley said MDA is in “active discussions” with the U.S., and being an approved supplier to bid for work on this initiative guarantees MDA a “nice, strong position… in the U.S. defence sector.”

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MDA’s existing deals with American defence companies and its new Montreal facility position it well as an established and “high-volume producer,” according to Beacon Securities Ltd. analyst Russell Stanley.

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While MDA might have to contend with local content requirements abroad, Canada’s own efforts to boost government procurement of Canadian companies’ products and services will give it a leg up at home as the Mark Carney government accelerates its $82-billion push to rebuild the Canadian military and boost defence innovation.