Interview with Redwire CEO Peter Cannito

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What is Redwire and why was it created?

Peter Cannito 0:05
In the last five or so years since Redwire has formed, we believe we have entered into a second golden age of space that's primarily driven by commercial companies, quite frankly, as opposed to just governments. And that was the core thesis behind Redwire, and that's why we exist today.
Mac Greer 0:29
That was Redwire Chairman and CEO Peter Conito. I'm Motley Fool producer Matt Greer. Redwire is a space technology company building infrastructure for the space economy. Motley Fool contributor Lou Whiteman recently talked to Conito about that space economy and about the growing business of Redwire. Greetings, Fools.
Lou Whiteman 0:50
I'm Lou Whiteman, Senior Analyst here at The Motley Fool. My guest today is Peter Canito, Chairman and CEO of space and defense infrastructure company Redwire. Now, Redwire has been, you know, in business since I think 2020, formed by a couple acquisitions and public since 2021.

How has the space economy evolved in recent years?

Lou Whiteman 1:06
Peter, welcome to The Motley Fool. Thanks for being here. Yeah. Thank you for having me. All right. Let's start out. I kind of like getting out it over what you do. But what is Redwire? Let's talk about kind of what is Redwire do and kind of let's make this fun. You know, the moment you needed to exist, like why does the world need Redwire?

What role does Redwire play in the commercial space industry?

Lou Whiteman 1:22
That's that's how I want you to explain the company.
Peter Cannito 1:24
Yeah, no, that's a great way to put it. So I think if we can hit on that, then the rest of the messaging is clear. So Redwire was formed initially by a private equity company who realized that we were entering into a second golden age of space, that the first golden age of space was around the Apollo program back in the 60s and early 70s. And since then, there had been just incremental progress. And some might even say concerning the moon program, some level of regression. But in the last five or so years since Redwire has formed, we believe we have entered into a second golden age of space that's primarily driven by commercial companies, quite frankly, as opposed to just governments. And that was the core thesis behind Redwire.
Peter Cannito 2:09
And that's why we exist today.
Lou Whiteman 2:11
Yeah.

What are the implications of Redwire's acquisition of Edge Autonomy?

Lou Whiteman 2:11
And to put numbers on it, and I always cringe when I hear numbers like this, but it's the Morgan Stanley report, $1 trillion global space industry by 2040. You know what? I'm enough of a cynic. I'll take the under there, but I think it is getting much bigger. And yeah. So what I've pitched this internally. The two things I fall back on with Redwire is, and I know this, I'm curious if you like this or you're going to cringe with this, but sort of the Transdime for space. Transdime, of course, is an aerospace company that makes all of the essential parts that make all of this possible. And it feels like that Redwire, that that was the opportunity that you were kind of seeing that like, you know, a lot of things have to go into these massive missions.
Lou Whiteman 2:52
It's great to be the prime, too.

How does Redwire's business model differ from traditional aerospace companies?

Lou Whiteman 2:54
And we can get into that. There's opportunities there. But kind of just the nuts and bolts that makes it all possible if we are going to get to that $1 trillion number or whatever it is. Is that fair or am I missing it?
Peter Cannito 3:04
Yeah, yeah. No, so that in the initial thesis of Redwire for going public and where we've been really up until the last year and a half, the transdome of space was a very accurate approach. We like to say that we provide the fundamental building blocks of space, those core subsystems and components that every space mission needs, whether it's commercial, civil or national security. But in the last about year and a half, we've been executing on a strategy called moving up the value chain, where we've started to become not only a critical provider of subsystems and components, but a platform provider. And through a combination of organic investment and acquisition, we now have seven platforms, five spacecraft and two uncrewed air systems that
Peter Cannito 3:54
and aircraft systems or drones, as people like to call them.

What are the potential challenges facing the space industry?

Peter Cannito 3:58
So we've been moving up the value chain. So I like to say we're a little bit more, we started out TransDymer, a little more L3 now, where L3 made a pivot a number of years ago to become that sixth prime, as they've talked about.

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