Lockheed Martin wins 8216 space fence 8217 deal

Lockheed Martin has revealed it has won a massive new contract to provide the US Air Force with a ground-based radar for tracking objects in space – which has been subbed a space fence.

The company was selected ahead of a range of competitors for the deal, which is worth a total of $915 million (£546 million). The plan is for the fence to be operational by September 2017.

It is possible that the space fence will be based on the Marshall Islands in the Pacific, with the scheme having been designed to track both satellites and smaller objects.

Shares in the company rose by 0.28 per cent on the New York Stock Exchange on the back of the contract win, while the firm's share price was up by a further 0.39 per cent in after-hours trading in the US.

Acquisition news

The award of the space fence contract to Lockheed Martin comes only a few days after it was revealed that the company is buying Astrotech Space Operations, which is a satellite division of Astrotech Corp. The firm, which is headquartered in Austin, Texas, was formerly known as Spacehab and was based in Houston.

Marillyn Hewson, Lockheed Martin’s chief executive, said in a statement that the firm wanted to acquire "expertise in the final stages of launch preparation complements our existing capabilities in satellite design, production and integration". The purchase of Astrotech enables it to do this.

It is likely that the purchase of Astrotech was linked to the contract win with the US Air Force, as the technology that Lockheed Martin has been able to acquire will be useful as it builds and maintains the space fence in the coming years.

Roman Schweizer, a defense policy analyst at Guggenheim Partners, stated that the acquisition is a relatively small one, adding: "Lockheed has been very selective in the companies they acquire or lines of business they invest in."

Ms Hewson added that Lockheed Martin will continue to make acquisitions in the coming months to allow it to move into new markets.

Find up to date information on the FTSE 100 and spread betting strategies at City Index