Karman Space & Defense Acquires Industrial Solid Propulsion

Insider Brief

• Karman Space & Defense has acquired ISP, a Utah-based small-diameter solid propellant technologies company, to expand its capabilities in UAS propulsion, intercept systems, and energetic solutions.
• ISP brings over 40 years of flight heritage, proprietary propellant formulations, and full in-house manufacturing and testing capabilities, aligning with Karman’s strategy to support DoD priorities and agile defense programs.
• The acquisition was funded through a $75 million increase to Karman’s Term Loan B facility, with the $60 million deal structured in cash, stock, and potential earnouts.

PRESS RELEASE – Karman Space & Defense (“Karman”, “Karman Holdings, Inc.” or “the Company”) (NYSE: KRMN), a leader in the rapid design, development and production of critical, next-generation system solutions for launch vehicle, satellite, spacecraft, missile defense, hypersonic and UAS customers today announced it has acquired ISP, a leader in specialty energetic propulsion technologies including small boost motors and solid propellant gas generators for the rapidly growing UAS, UAS intercept and rocket-assisted takeoff systems markets. The transaction closed on May 28, 2025.

Founded in 1983 and based in Cedar City, Utah, ISP has developed a proprietary portfolio of propellant formulations and tactical motor configurations, with proven flight heritage across a number of high-priority U.S. Department of Defense (“DOD”) programs. ISP designs, tests, qualifies and manufactures small-diameter energetic and propulsion systems to meet mission requirements for distance, total impulse, peak thrust and burn time. With the required engineering and manufacturing capabilities to take a product from concept-to-production, ISP is a proven partner to prime customers in delivering integrated energetic and propulsion systems, with more than 40 years of flight heritage.

“We have been working collaboratively with ISP on a number of exciting opportunities for many months and believe that ISP is a natural, strategic fit within the Karman portfolio,” said Tony Koblinski, Karman Chief Executive Officer. “This acquisition strengthens our core competency in energetics, expands our offering in small-diameter solid propellant technologies and will allow us to serve our customers even better. ISP’s proprietary portfolio of propellant formulations and unique manufacturing capabilities furthers Karman’s mission of leveraging advanced technologies to drive agile solutions for customers across the space and defense market. We welcome the talented ISP team to Karman and look forward to working together to deliver even more value to our customers.”

ISP leverages its leading IP portfolio and full suite of in-house, small batch manufacturing capabilities to rapidly qualify and deliver efficient, technically optimal energetic systems. ISP’s full-service capabilities include propellant and cartridge design, grain formulation, mixing, machining, cartridge loading and hot-fire testing. ISP’s propulsion expertise in small-diameter systems and cartridges and its programmatic positions are well aligned with current and future funding priorities, specifically in deployment and launch systems for one-way loitering munitions, counter-UAS and intercept systems.

Additionally, ISP has a long history of supporting STEM-based educational curricula for schools, camps, clubs and youth organizations. Empowering the next generation of energetics and propulsion engineers with tools to help them experiment, learn and launch their careers is central to ISP and highly aligned with Karman’s approach to supporting local communities and identifying top talent.

On May 27, 2025, Karman successfully closed an offering to increase the size of its existing $300 million Term Loan B by $75 million. The majority of the proceeds from this offering were used to fund the acquisition of ISP, which consisted of $50 million in cash, approximately $5 million in Karman common shares and $5 million in potential earnout payments.