Musk’s SpaceX invests in British engineering company started in professor’s garage
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Elon Musk’s SpaceX has agreed to acquire a 10pc stake in a British electronics company that was founded in a professor’s garage 47 years ago.
County Durham-based Filtronic’s shares rose by more than 50pc after announcing a “strategic agreement” with SpaceX on Wednesday.
It marks a deepening relationship between Filtonic and SpaceX, as the UK company already provides power amplifiers for Starlink satellites to boost internet signals.
As part of the announcement, Filtonic said SpaceX had recently made a new $19.7m (￡15.8m) purchase order.
This will grant SpaceX warrants that can be converted to shares after it has sold Mr Musk’s company $60m of components.
SpaceX will receive shares worth 5pc of Filtronic for supplying parts used to provide satellite internet at existing frequencies, and a further 5pc for ordering parts for future products.
The deal is a major boost to Filtronic, which was founded in 1977 in the garage of David Rhodes, an electrical engineering professor at the University of Leeds.
It was originally set up to provide components for military aircraft but later became a major supplier for Nokia mobile phones and hit a market value of more than ￡1.5bn during the dotcom boom.
However, Filtronic lost 99pc of its value after the bubble burst and shares have never recovered.
Mr Rhodes bought millions in shares as the company’s value was collapsing, a move he later said “cost the family a bit of money”, and retired in 2006.
Wednesday’s share surge means it is now worth around ￡110m.
Its biggest shareholders include David Newlands, the former chairman of science investor Touchstone Innovations.
In a trading update on Wednesday, Filtronic said new deals meant sales this year and next would be significantly ahead of market estimates.
Filtronic’s chief executive Richard Gibbs said: “We are delighted to enter into this important Strategic Agreement with SpaceX, a market leader in LEO [low earth orbit] satellite constellations.
“This milestone development in our SpaceX partnership underlines our core value proposition of high-quality engineering and operational excellence. It also provides Filtronic with the opportunity to scale manufacturing, build capability and execute our technology roadmap.”
Mike Nicolls, SpaceX’s head of Starlink engineering said the deal “will enable the Starlink network to continue to grow and connect millions of more people around the world with high-speed, low-latency broadband internet”.
Starlink, which beams internet from millions of satellites to dishes, has been widely used by Ukraine in its defence against Russia.