AE Industrial Acquires Space Propulsion and Rocket Engine Business From L3Harris

L3Harris said that the transaction dovetails with the U.S. Department of War’s initiatives for creating a more agile defense industrial base.

A photograph showing a WESCAM MX-15 EO/IR imaging system, manufactured by L3Harris Technologies, in Aix-en-Provence, southeastern France, on Sept. 5, 2025. Miguel Medina/AFP via Getty Images

Private investment buyout firm AE Industrial Partners announced on Jan. 5 that it acquired a controlling interest in the space propulsion and power systems business of L3Harris Technologies in a deal valued at $845 million.

Boca Raton, Florida-based AE Industrial said the deal encompasses L3Harris business units in five different U.S. locations that have more than six decades of experience producing upper-stage rocket engines as well as space propulsion, avionics, and nuclear power assets under the famed Rocketdyne name, which will be revived for the new business unit.

Melbourne, Florida-based L3Harris said it will maintain a minority 40 percent stake in the new space technology business.

The deal, which is expected to close in the second half of 2026 pending regulatory approvals, gives AE Industrial exposure to L3Harris’s existing propulsion technologies as well as its space nuclear propulsion engine systems that are being developed in conjunction with NASA to help take humans and payloads to Mars.

Jon Lusczakoski, principal at AE Industrial, said his company is in a unique position to help scale the new Rocketdyne business unit that’s critical to exploring Mars and cislunar space, which is between Earth and the moon.

“Rocketdyne’s unparalleled heritage offers the perfect foundation for this mission,” Lusczakoski said. “We see a unique opportunity to apply our deep experience in scaling space systems to this iconic business—ensuring Rocketdyne remains a critical pillar of national security while aggressively evolving to meet the demands of the future.”

Kirk Konert, managing partner at AE Industrial, said Rocketdyne sits at the birthplace of U.S. rocket propulsion. Rocketdyne’s RL10 engine has sent spacecraft to every planet in the solar system, including interstellar space-pioneering craft Voyager 1 and Voyager 2. The engine was also used for Atlas V and Delta IV heavy-lift rockets.

“This transaction will not only modernize and give new life to a pioneer of space and national defense technology, but it will also create a new hybrid model of agile collaboration, combining the stability and power of a national defense prime with the innovation of a specialized investor,” Konert said.

“By taking the historic engine—the RL10—and applying modern manufacturing discipline, we will honor its design while revolutionizing the production line,” he added.

L3Harris said its RS-25 rocket engine business was excluded from the acquisition. L3Harris completed its acquisition of Aerojet Rocketdyne in July of 2023 in a deal valued at $4.7 billion.

Christopher Kubasik, chairman and CEO of L3Harris, said the transaction dovetails with the U.S. Department of War’s initiatives for creating a more agile defense industrial base.

“This transaction further aligns the L3Harris portfolio with [Department of War] core mission priorities,” Kubasik said.

Jefferies LLC served as financial advisor to L3Harris in the deal. The acquisition is among a handful of space-related investments by AE Industrial, which include American Pacific Corporation, Calca Solutions, Firefly Aerospace, Redwire Space, and York Space Systems.

“The acquisition of Rocketdyne demonstrates AE Industrial’s continued commitment to investing in the national security space and space exploration markets,” said David Rowe, co-CEO and managing partner at AE Industrial, which had more than $7.5 billion in assets under management at the end of the third quarter of 2025.

“These companies are critical market leaders, and the addition of Rocketdyne is a perfect fit to AE Industrial’s strategy and portfolio construction.”