Czechoslovak Group (CSG), a Prague-based defence and industrial group, has paid about $656 million for a 9.5 per cent stake in MDA Space, a U.S. securities filing shows, and says it is now the Canadian company’s largest shareholder.
CSG announced the investment this week, its first major move into space. The group said it wants to be “a long-term strategic shareholder” and could work with MDA Space on manufacturing or assembly plants in Europe, on joint acquisitions, and by introducing MDA to CSG’s customers.
Mike Greenley, MDA Space’s chief executive, welcomed CSG as a strategic investor in CSG’s release. “As countries around the world look to increase their sovereign defence and space investments, the expansion of MDA Space’s global investor network is a strategic tool for continued expansion of our business,” he said, adding that the company “continues to strengthen its investor and business partner base in Europe.”
How CSG bought in
CSG set up the position on July 27, when its subsidiary Mariselle a.s. signed a share forward with Morgan Stanley Europe, a contract that gave CSG the gain or loss on MDA shares without owning them. The contract could only be settled in cash until CSG obtained Investment Canada Act approval, which it did Oct. 8, according to the Schedule 13D that CSG filed with the U.S. Securities and Exchange Commission (SEC) on Wednesday.
CSG acquired the 15.4 million shares outright on Oct. 13, paying an average of $42.69 each. That is about six per cent above MDA’s closing price the previous Friday.
Early reports valued the stake at market prices and put it nearer $618 million. The filing’s share count and average price put the cost at about $656 million, paid from CSG’s working capital, by SpaceQ’s calculation.
Stanislav Kuba, CSG’s investment director, said the group approaches space as it does every expansion, “with a long-term industrial perspective and strict financial discipline.”
The stake is just under 10 per cent, the level at which Canadian securities rules require an investor to publish an early-warning report. Because MDA also trades on the New York Stock Exchange, CSG had to report in the U.S., where the line is five per cent.
A second Czech owner
PPF Group, the investment firm controlled by Renata Kellnerová, is another Czech investor in MDA. It reported holding 10.8 million MDA shares, or 7.8 per cent, in a May filing and has not reported a change since.
MDA has since sold 23 million new shares to help pay for its acquisitions, which on its own dilutes that stake to about 6.7 per cent, SpaceQ calculates. Any shares MDA repurchases under its buyback, which began Sept. 23, would push that figure up slightly.
PPF had held MDA for more than five years when Czech outlet Deník N reported the stake in April. On the latest filings and SpaceQ’s calculation, the two Czech groups own about 16 per cent of the company. CSG’s filing states it has no arrangements with anyone else concerning MDA’s shares.
Connor, Clark & Lunn Investment Management, a Vancouver asset manager, is the only other investor to report a stake above five per cent to the SEC. Its July filing showed 7.7 million shares as of June 30, about 4.8 per cent of today’s share count.
Northern Private Capital, the Toronto firm that led the $1-billion purchase of MDA from Maxar Technologies in 2020 and returned it to Canadian control, has been selling down since. An early-warning report in March 2024 recorded a sale that left its group just under the 10 per cent line, by SpaceQ’s calculation.
What the filing allows
CSG chose the longer Schedule 13D rather than the short form filed by passive investors. It says it bought the shares for investment purposes, but reserves the right to talk to MDA’s management and board and to make proposals on board composition, capital allocation or “a sale of the Issuer as a whole or in parts,” wording that is common in such filings.
MDA’s own buyback could still nudge CSG toward the Canadian reporting line without CSG buying another share. The Toronto Stock Exchange approved MDA’s plan in September to repurchase up to 8.1 million shares. If MDA bought and cancelled them all, CSG’s stake would rise to 9.97 per cent.
CSG’s filing says the government approved the investment, but neither the filing nor the release says what the review involved or whether CSG gave any undertakings.
CSG’s wider reach
CSG listed on Euronext Amsterdam in January at €25 a share, in what was billed as the world’s largest defence initial public offering. Its shares were trading just under €15 on Tuesday, CzechCrunch reported.
The same report put CSG’s first-half revenue up by more than a sixth, at €3.25 billion.
CSG has also been expanding in Canada. In August it took a stake in North Vector Dynamics, a Calgary developer of missile and counter-drone systems, and its release says Cameron McKenzie, a former L3Harris WESCAM executive, will be responsible for its activities and expansion in the country.
Before MDA, CSG’s space investments were small venture bets. Presto Tech Horizons, a fund CSG backs, has invested in British thermal-imaging satellite company SatVu and German cargo-capsule startup Atmos Space Cargo.
CSG’s offer to co-invest in European plants could add to the presence MDA is building in the European Union (EU), where it agreed in July to buy 70 per cent of Collecte Localisation Satellites (CLS), the French satellite data company. Canadian companies also gained access on Aug. 1 to the EU’s €150-billion Security Action for Europe (SAFE) defence loan program, where European-content rules are set project by project.
Michal Strnad, CSG’s chairman, tied the investment to that defence market. “We expect that CSG’s customers will be able to benefit from a much wider and more complex product offering in an era of rapidly increasing dependency of our security on space applications,” he said.
Next for MDA
MDA expects its purchase of Blue Canyon Technologies to close in the fourth quarter and the CLS deal by the first quarter of 2027. Its third-quarter results, expected in mid-November, will give analysts their first scheduled chance to ask Greenley about CSG. Any CSG purchase that takes it past 10 per cent would trigger a Canadian early-warning report, and a proposal to MDA’s board would normally require an amended 13D.