The purchase price of Planet for Boundless Spatial halves after the failure of its disclosure – Quartz



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Planet, a leading satellite company, daily photographs the Earth's landmass with more than 150 satellites. The challenge now is to monetize this information. Last year, the company thought it had a solution with the acquisition of Boundless Spatial, which builds software for geospatial data management and analysis.

Boundless was thought to have strong relationships with the National Geospatial Intelligence Agency (NGA). The NGA acts as a kind of geographic library for the military and its intelligence services and is a sought-after client of geospatial data providers. Planet executives were excited to use Boundless employees with security clearance in a new subsidiary, Planet Federal, dedicated to making their product more useful to the government.

A few weeks after the transaction was completed in May 2019, Boundless shareholders, including Vancouver-based Vanedge Capital and CIA-backed In-Q-Tel venture capital fund, received a letter from lawyers from Planet. He said the Boundless executives failed to disclose "information about important contracts with customers" and threatened prosecution.

According to documents reviewed by Quartz, both parties agreed in subsequent negotiations that the missed disclosure would reduce the purchase price (and Boundless investors' earnings) by more than half, from 40 to 16 million dollars. dollars. In recent years, the emerging satellite sector and related fields such as geospatial data analysis have received hundreds of millions of dollars in private investment, but profitable outlets are still scarce. The rewriting of this agreement suggests that the search for reliable revenues in satellite data is still ongoing.

The mystery, at least from the outside, is what the Boundless leaders did not disclose or what Planet's due diligence failed. A source familiar with the situation and unauthorized to talk about it told Quartz that it concerned the work of Boundless or the future work of the NGA. Boundless moved to St. Louis, Missouri in 2017, in part because the NGA is building a new campus.

"The terms of Planet's deal with Boundless are confidential and we can not talk about it," Planet spokesman Quartz said. "We are pleased to announce that the acquisition is complete and that Boundless is now Planet Federal. Planet Federal will focus on developing Planet's government operations in the United States, offering commercial products that meet the demands of governments, which are increasingly turning to commercial products and services. "

Planet

An image of Pyongyang, North Korea, captured by a Planet satellite in 2015.

Neither Vanedge nor In-Q-Tel responded to Quartz's repeated requests regarding the merger. Several former Boundless employees have not wanted to comment because of non-disclosure agreements put in place during the transaction.

As an intelligence agency, the NGA's budget is classified and its contracts are not included in the Federal Procurement Data System. But a spokesman said that all contracts exceeding $ 7.5 million are advertised on his website. Boundless is listed as having received a $ 36 million contract in 2017, but no additional contracts have been registered since. The NGA is currently paying Planet about $ 1 million a month for access to its data, as part of a relationship dating back to 2016.

Planet did not retain the services of an investment bank to manage the acquisition, but signed the deal itself after two successful acquisitions of satellite operators Black Bridge in 2015 and Terra Bella in 2017.

"I've known the Boundless team forever," said Robbie Schingler, co-founder of Planet, Quartz in December 2018. "It's a very small industry, people working in the geospatial sector."

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