In talking with Wall Street, L3Harris Technologies CEO Chris Kubasik lays out the company’s new timeline for the initial public offering and blueprint for positioning the business to investors. L3Harris Technologies is postponing the planned initial public offering of its missile solutions segment after deciding that investors are undervaluing the business.
In L3Harris’ second quarter financial report released Wednesday, the company said it now will look to try again at an IPO in mid-2027 versus the original plan for the second half of this year. L3Harris first laid out its intended timeline for the IPO in January after the Defense Department agreed to invest $1 billion in Missile Solutions.
The framework for the IPO remains unchanged. L3Harris will continue as the majority owner and controller of this new company, in which the U.S. government will hold an equity stake. DOD’s initial investment is in the form of convertible preferred securities that will convert into common equity in the new company.
During an earnings conference call with investors Thursday, L3Harris CEO Chris Kubasik cited the IPO landscape’s overall conditions as the main reason why the company has decided to pull back for now.
“We have land, we have operating factories, backlog, great financials, a great workforce, and we’re actually making money,” Kubasik said. “A lot of the recent IPOs are obviously missing some or all of those key elements to a business, and the market is adjusting to valuation.
“I think we’re kind of caught in that process a little bit, so I want to let everything settle down. We’ll re-evaluate it,” Kubasik added.
As L3Harris sees the situation, the new path forward centers around efforts to grow Missile Solutions’ backlog and revenue profile before taking the business public. Kubasik said the company is currently negotiating $20 billion in new contracts that would triple the backlog.
Capacity expansion is also a core part of the IPO’s new timeline as L3Harris is working to build factories, assembly lines and production capacity for solid rocket motors and propulsion systems.
L3Harris does not believe it will need a bulk of the IPO’s proceeds until the 2027-to-2029 timeframe, Kubasik added.
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