What's been a busy 12 months for Albuquerque-based X-Bow Systems Inc. is continuing, this time with the announcement of an out-of-state acquisition deal.
X-Bow said Tuesday it bought Spencer Composites Corp., a manufacturer of composite and metallic structures based in Sacramento, California. Jason Hundley, X-Bow's CEO, declined to disclose the terms of the deal.
Hundley said the two companies have worked together for the past four years. Specifically, Spencer Composites has been the supplier for X-Bow's large-sized rocket motors, which the Albuquerque company has static tested and flight tested in recent years.
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The company develops advanced manufacturing systems for solid rocket motors and launch vehicle energetics, and it designs and builds modular solid rocket motors and small launch vehicles. Besides its Albuquerque headquarters, X-Bow operates in Socorro and outside New Mexico in Alabama, California, Colorado, Texas and Washington, D.C.
X-Bow plans to continue operations at Spencer Composites' 50,000-square-foot fabrication facility in Sacramento, where the company will house its "low-rate, development prototype capabilities that Spencer [Composites] has been building up for the last 30 years," Hundley said. Brian Spencer, Ph.D., president and CEO of Spencer Composites, founded the company with his wife, Linda, in Lincoln, Nebraska, in 1994 and moved it to Sacramento in 2000.
"I see continued technological innovation in collaboration with X-Bow Systems and expect the expertise from both organizations will leverage to optimically achieve advanced composite solutions for our collective customers," Brian Spencer said in a statement.
Spencer Composites' 26 employees will remain with the company, bringing X-Bow's total employee count between full-time and part-time workers to "well over" 200, Hundley said.
The deal also includes the transfer of "several key patents" to X-Bow, according to a Tuesday news release.
Following Tuesday's deal announcement, Hundley said an ongoing "internal assessment" will inform whether the company plans to hire more employees in Sacramento or scale more "production-oriented capabilities" elsewhere.
"Our goal is to basically get the best out of how Spencer has built up the business," Hundley said. "We'll let the hiring decision fall out from there."
X-Bow, since late last year, has received several contract awards, including a $64 million contract with the U.S. Department of Defense for rocket motor design qualification, an $18 million follow-on contract from the Air Force Research Laboratory for developing one of the company's manufacturing capabilities and, most recently, a pair of U.S. Navy rocket motor contracts worth $3.4 million and $4.1 million, respectively.
Bringing in Spencer Composites will help X-Bow meet the demands of those contracts "at a better value proposition," while blending the information technology and other areas of expertise across the companies, Hundley said.
"With our advanced manufacturing approach, the ability for us to add an internal composite and or metallic structure capability allows us to really open the trade space even more on how we approach solid rocket motor manufacturing," Hundley said. "That is pretty exciting."
The company is standing up additional manufacturing capabilities at a new $25 million manufacturing facility outside Austin, Texas, first unveiled in February 2023.
Hundley said construction at that facility is ongoing. He added the company is looking to accelerate the pace of that construction "given the demand that we see for solid rocket motors in the U.S."
X-Bow wants to expand its footprint in Socorro, as well, where it currently handles research and development work. Hundley said the company is currently in talks with the Energetics Materials Research and Testing Center, a division of the New Mexico Institute of Mining and Technology, about some facilities in the city that may become available.
In terms of additional funding, Hundley didn't provide further updates on X-Bow's ongoing Series B raise, which he told New Mexico Inno in March could land at around $75 million. "We're looking for news in the very near future," he said in regards to the raise.