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HUNTINGTON BEACH, Calif. - Karman Space & Defense (NYSE: KRMN), a key player in the design and production of system solutions for the aerospace and defense sectors, has completed the acquisition of Industrial Solid Propulsion (ISP), a specialist in energetic propulsion technologies. The transaction, which closed on May 28, 2025, is expected to strengthen Karman’s position in the market by expanding its capabilities in small-diameter solid propellant technologies.
ISP, headquartered in Cedar City, Utah, brings over 40 years of experience and a significant intellectual property portfolio to Karman. The acquisition includes ISP’s 14 proprietary propellant formulation families and more than 400 motor configurations, which are integral to a variety of U.S. Department of Defense programs. This strategic move is anticipated to be accretive to Karman, enhancing key financial metrics such as revenue growth, Adjusted EBITDA margin, contracted revenue, and cash flow.
Karman’s CEO, Tony Koblinski, expressed confidence in the acquisition, stating that the integration of ISP will bolster Karman’s core competencies and provide customers with superior solutions in the space and defense market. He also highlighted the alignment of both companies’ commitment to community support and education in STEM fields.
To finance the acquisition, Karman increased its existing $300 million Term Loan B by $75 million, with the majority of the proceeds allocated to the ISP purchase. The deal involved a $50 million cash component, approximately $5 million in Karman common shares, and an additional $5 million in potential earnout payments. Despite the new debt, InvestingPro analysis shows Karman maintains strong financial health with a current ratio of 3.34, indicating robust liquidity. The company operates with a moderate debt level, and its Altman Z-Score of 8.3 suggests solid financial stability. For detailed financial analysis and 15+ additional ProTips, investors can access the comprehensive Pro Research Report on InvestingPro.
Citi acted as the exclusive financial advisor, while Willkie Farr & Gallagher LLP served as legal advisor to Karman for this transaction. KAL Capital advised ISP.
The acquisition is in line with Karman’s ongoing efforts to deliver advanced technology solutions to combat threats in the hypersonic, missile defense, UAV, and space sectors. The company is known for its rapid design and development of critical, integrated systems and its focus on propulsion, deployable shrouds, launchers, and energetic subsystems.
This information is based on a press release statement, reflecting the details of the acquisition and the expected benefits for Karman Space & Defense and its stakeholders.
In other recent news, Karman Holdings has reported impressive financial results for the first quarter of 2025. The company achieved a revenue of $100.1 million, marking a 20.6% increase from the previous year, and exceeded consensus estimates by 4%. The gross margin expanded by 450 basis points to 39.4%, while adjusted EBITDA rose by 25% to $30.3 million, demonstrating strong profitability. Following these results, RBC Capital Markets raised Karman Holdings’ price target from $38.00 to $44.00, maintaining an Outperform rating. This optimism is supported by Karman Holdings’ substantial funded backlog of $636 million, which provides 95% revenue visibility for the year.
Additionally, Karman Holdings’ management has reiterated their revenue guidance for the full year 2025, projecting a range of $423-$433 million, representing a 24% growth. The company also anticipates adjusted EBITDA to be between $132-$137 million, a 27% increase. Analysts have noted the strategic benefits Karman Holdings could gain from shifts within the Department of Defense, given the company’s market exposure. The company plans to pursue 1-2 small acquisitions annually to strengthen its strategic position. These developments reflect Karman Holdings’ strong financial footing and potential for continued growth in the space and defense sectors.
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