The new owner of Stratolaunch, the space venture started by late Microsoft co-founder Paul Allen, is Steve Feinberg, a secretive billionaire with close ties to President Donald Trump.
In October, Stratolaunch announced that it had transitioned ownership from Allen’s holding company, Vulcan Inc., but did not identify who had bought the company. Now business filings obtained by GeekWire show the new owner to be Cerberus Capital Management, a controversial private equity firm specializing in distressed companies.
Cerberus’ holdings have included GM’s finance division, defense contractor DynCorp and Bushmaster, a manufacturer of AR-15-style rifles. Feinberg, the firm’s co-founder and CEO, donated nearly $1 million to then-candidate Trump in the last week of the 2016 presidential campaign.
Eighteen months later, Trump named Feinberg to chair the President’s Intelligence Advisory Board, an intelligence oversight panel with access to some of the country’s most closely held secrets.
Stratolaunch was founded by Microsoft co-founder Paul Allen in 2011 to provide a fast, cost-effective air launch system for small satellites. The company built the world’s largest plane, incorporating parts from two Boeing 747 jumbo jets, but did not manage to fly it before Allen’s death in October 2018.
Although the carrier aircraft made a successful maiden flight in April this year, Vulcan was already scaling back its efforts and cutting workers. In June, it was said that the company was for sale with a $400 million price tag, reportedly prompting Virgin Galactic owner Richard Branson to make a counter-offer of just $1.
Neither Stratolaunch nor Cerberus would confirm the actual purchase price of the company to GeekWire. Filings with regulators in California and Washington show that a new LLC business, also called Stratolaunch, was incorporated in late October, at Stratolaunch’s existing offices in Seattle and Mojave, Calif. The new Stratolaunch’s executive vice president is named as Michael Palmer, Cerberus’ managing director.
Private-equity firms typically replace existing managers as a prelude to realigning businesses they buy, which can involve firing, automation and offshoring.
However, it appears that Jean Floyd, Stratolaunch’s president and CEO since 2015, remains in his roles for now. On Tuesday, Floyd tweeted that Stratolaunch had grown from 13 to 87 employees over the past two months and that the company’s new mission was “to be the world’s leading provider of high-speed flight test services.”
Stratolaunch grew from 13 to 87 employees over the past 2 months. 2020 will be a great year! VISION: Breaking Barriers. MISSION: To be the world’s leading provider of high-speed flight test services. VALUES: Deliver today. Grow for tomorrow. Accuracy and integrity always.
— Jean Floyd (@WJeanFloyd) December 11, 2019
He also wrote that Stratolaunch’s new vision was “breaking barriers.” This suggests a pivot away from satellite launches to hypersonic flight tests. These are difficult to carry out over land due to disruptive sonic booms, but much easier to conduct over the open ocean from an air-launched system.
Militaries and defense companies around the world are in the process of developing hypersonic vehicles to deliver both conventional and potentially nuclear weapons.
All the jobs currently listed on Stratolaunch website are at its Mojave flight facility, raising the possibility that the company’s Seattle office is living on borrowed time. Job descriptions make no mention of satellite launches, instead noting that “Stratolaunch is developing an air-launch platform to contribute to high-speed research and development.”
“The goal of Stratolaunch is to use the air-launch platform for enabling technologies that may not exist otherwise,” the job descriptions say.
Neither Stratolaunch nor Cerberus immediately replied to requests for comment.