York Space goes public, riding Pentagon demand

WASHINGTON — York Space Systems, a Denver-based satellite manufacturer, began public trading Jan. 29 on the New York Stock Exchange under the ticker YSS as investors continue to bet on sustained growth in U.S. defense spending.

Shares opened at $38, up 11.7% from the $34 initial public offering price. The IPO raised $629 million and valued the company at about $4.75 billion, according to offering documents.

Founded more than a decade ago as a small-satellite specialist, York has steadily expanded its role in the national security space market. The company designs and builds satellites, supplies ground systems and operates constellations, positioning itself as an integrated provider at a time when the Pentagon is pushing to field large numbers of lower-cost spacecraft.

York’s rise accelerated in 2022, when it secured a central role supplying satellites to the Space Development Agency, a U.S. Space Force organization building a proliferated low Earth orbit constellation intended to provide missile tracking and data relay to U.S. military forces. 

In recent years, York has expanded its footprint. Through its parent company, York pursued the acquisition of Atlas Space Operations, a move aimed at expanding its ground-station and satellite communications services as the company seeks a larger share of recurring revenue tied to operating spacecraft once they are in orbit.

Current production of 300 satellites per year

Chief executive Dirk Wallinger said the timing of the IPO aligns with what he sees as durable demand driven by geopolitical tensions and rising defense budgets. Speaking to reporters Jan. 29, Wallinger said York expects to benefit from elevated U.S. military spending as it continues to build satellites for the Space Development Agency and pursues opportunities tied to emerging defense initiatives, including the proposed Golden Dome missile defense system.

Wallinger said the fresh capital will be used to expand production capacity. “We’re at about 300 space vehicles a year,” he said. “We want to ramp that up more … A thousand is probably aggressive, but we want to certainly aim and vector in that direction and start moving towards it, which this IPO will help us do.”

While York does have commercial customers, Wallinger pushed back against the idea that the company is overly reliant on military contracts, arguing that defense spending trends are unlikely to reverse. 

“The reality is that defense budgets are not going down, they’re going up,” he said. Regardless of which administration is in power, Wallinger added, “We do have threats. We do have needs that need to be addressed that, frankly, aren’t being addressed now … so defense companies are going to do well.” York, he said, believes it is well positioned because “we are half the price of any of our peers.”

Emerging competition from new entrants

Competition in satellite manufacturing is expected to intensify as new startups and established aerospace firms vie for Pentagon contracts. Wallinger said York is prepared for a more crowded field. “I think there’s definitely enough contracts for multiple vendors,” he said. Of newer entrants, he added, “there’s certainly potential for them to dovetail in eventually. But right now, the government seems to want to go with proven providers.”

York’s principal stockholder is private equity firm AE Industrial Partners, which made its initial investment in the company in 2022. A regulatory filing dated Jan. 23 estimates that AE Industrial Partners will hold a 27.4% ownership stake in York Space. The filing also notes that the firm’s influence exceeds its economic interest. Through voting agreements with other shareholders, AE Industrial Partners is expected to control more than 50% of the voting power in director elections, allowing York to qualify as a “controlled company” under New York Stock Exchange rules.