Maxar's stock price leaped more than 21% to $17.39 a share on news of the deal, under which Maxar will sell its space robotics division, MDA, to a consortium led by Toronto-based investment firm Northern Private Capital.
Maxar's sale of its space robotics unit, combined with a deal to offload real estate in Palo Alto, Calif., will reduce the company's debt by $1 billion, said Biggs Porter, Maxar's chief financial officer, in a press statement.
The sale also will help Maxar reduce its leverage ratio and move ahead with plans to "prioritize investments" aimed at boosting growth in two core areas, space infrastructure and earth intelligence.
Northern Private Capital plans to allow the 1,900-employee MDA to operate as a "stand-alone" company within its portfolio. The agreement includes all of MDA's Canadian businesses, including radar satellite products and ground stations, as well as robotics, defense and satellite components.
MDA is slated to produce $85 million in adjusted-EBITDA and $370 million in revenue for 2019.
After the transaction is complete, MDA will continue to do business with its former corporate owner Maxar, selling the company subsystems and components and both selling satellite data to each other.
The deal must clear a number of regulatory approvals before it becomes final, including a review by the Committee on Foreign Investment in the United States, a Hart-Scott-Rodino review by the Department of Justice and the Federal Trade Commission, as well as similar government reviews in Canada.
"The sale of MDA furthers execution on the company's near-term priority of reducing debt and leverage," said Dan Jablonsky, Maxar's CEO.