The U.S. Department of Defense recently committed a $1 billion convertible preferred equity investment in the Missile Solutions business of Florida-based L3Harris Technologies, a defense and space manufacturing company, becoming an anchor investor. As part of the transaction, the business will become a separate, publicly traded company.
The move is intended to expand the production capacity of U.S. solid rocket motors and is the first direct-to-supplier partnership of its kind. The agreement will provide the investment and stability needed to increase production, modernize facilities, and bolster industrial resilience.
“We are fundamentally shifting our approach to securing our munitions supply chain,” Michael Duffey, Acquisition and Sustainment under secretary of defense, said. “By investing directly in suppliers we are building the resilient industrial base needed for the arsenal of freedom. This direct-to-supplier model is a crucial step toward replenishing stockpiles, rebuilding our military, and reestablishing deterrence by ensuring the availability of critical components.”
The partnership is part of the department’s Go Direct-to-Supplier initiative and its Acquisition Transformation Strategy that calls for the department to negotiate with and invest directly in critical suppliers while proactively managing the single points of failure.
The department and L3Harris will, pending Congressional authorization and appropriations, negotiate multi-year procurement framework agreements for solid rocket motors.