Seraphim Space Investment Trust PLC (LSE:SSIT) has completed the sale of portfolio company ALL.SPACE to York Space Systems, though the deal's value has fallen below its last reported carrying value after a decline in York's share price.
The FTSE 250-listed space-tech investor received initial consideration of approximately $17.9 million (£13.4 million) in cash and 1.24 million York shares, with up to a further $8.1 million (£6.1 million) in cash held in escrow pending post-completion adjustments.
Based on York's closing price on 7 July, the total initial consideration equates to approximately $46.3 million (£34.7 million), rising to around $54.4 million (£40.7 million) if all escrow funds are released.
That compares with a fair value of £57.4 million ascribed to the holding at 31 March.
Seraphim said the shortfall is primarily the result of York's shares standing at $22.92 at closing, against the agreed $34 per share issue price for the equity component of the deal.
The trust invested a total of £31.3 million in ALL.SPACE, a smart terminal maker, having first backed the company in 2021.
The York shares are subject to lock-up agreements, with half restricted for six months after completion and the remainder for nine months.
Were York's share price to recover to $34 by the time the lock-ups expire, total consideration, including escrow funds, would rise to approximately $68.1 million (£50.9 million).
New York-listed York agreed to acquire ALL.SPACE in April, and the business will now operate as a wholly owned subsidiary.
James Bruegger, chief investment officer of Seraphim Space Manager, said the combination of York's and ALL.SPACE's ground and space-based solutions represents "an unrivalled and compelling capability set for assured communications" for the growing global defence market.
