DOD completes $1B investment in L3Harris missile solutions unit

The Defense Department has completed its $1 billion investment in L3Harris Technologies’ missile solutions unit ahead of a planned initial public offering of that business during the second half of this year, pending market conditions.

DOD’s capital infusion starts out as a convertible preferred security that will convert into common equity in a Missile Solutions IPO, which L3Harris first announced in January.

L3Harris said Thursday it will retain roughly 80% ownership of Missile Solutions and DOD is also receiving warrants to purchase additional shares in what is poised to become an independent, publicly-traded company.

Missile Solutions houses much of the legacy defense portfolio of Aerojet Rocketdyne, which L3Harris acquired in 2023 as a foray into the solid rocket motor and munitions markets.

Alongside the Orbital ATK business acquired by Northrop Grumman in 2018, Aerojet was one of the two primary providers of rocket propulsion systems for missile and space launch programs.

Demand for solid rocket motors and munition stockpiles has grown because of conflicts in Ukraine and the Middle East, while suppliers are being stretched on the capacity front.

DOD’s direct investment in the Missile Solutions business follows other equity stake acquisitions in rare earth mineral suppliers and the chipmaker Intel. The Trump administration has so far made direct investments in 10 companies total.

A bulk of the DOD investment and proceeds from any potential Missile Solutions IPO will go toward expansion and modernization efforts at solid rocket motor production facilities in Camden, Arkansas; Huntsville, Alabama; and Orange, Virginia.

Below are members of L3Harris' executive team ringing the opening bell on Thursday at the New York Stock Exchange.