Merger

SpaceDev and Starsys have signed a merger agreement, which is interesting to me because I used to be invested in Spacedev. If you look at the 5 year chart it’s up about 50% and has easily outperformed the broader market. It’s in an interesting market and has cool aims (affordable space travel) but the financials are not compelling unless you’re convinced this industry is going to be big. I imagine it will be, very long term…

And info on the merger:

Under the terms of the merger agreement, Starsys, a private Colorado corporation with headquarters in Boulder, will merge with and into a newly-created, wholly-owned subsidiary of SpaceDev. SpaceDev will pay approximately $9 million, which is broken down into $1.5 million in cash and $7.5 million SpaceDev common stock at the effective time of the merger, subject to adjustment as provided in the merger agreement. SpaceDev will also pay off at closing approximately $4.6 million of Starsys debt and forgive a $1.2 million loan from SpaceDev to Starsys. Following the merger, Starsys shareholders may also be entitled to receive, based on the achievement of certain performance criteria for each of the fiscal years ending December 31, 2005, 2006 and 2007, additional earnout consideration valued at up to approximately $19 million, with approximately $1 million in cash and $18 million in SpaceDev common stock. The number of shares issued will depend on both the achievement of the performance criteria and the prevailing stock price at the time of measurement. Current holders of Starsys common stock will become holders of SpaceDev common stock following the merger. The merger agreement is subject to a number of conditions including but not limited to the effectiveness of a registration statement for the stock to be issued and approval of the shareholders of SpaceDev and Starsys.

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