L3Harris Department of War Investment Fuels Missile Spin-Off
L3Harris Department of War investment backs a $1 billion convertible to fund a Missile Solutions IPO and focuses traders on SRM production and procurement.
KEY TAKEAWAYS
- Department of War agreed to a $1 billion convertible preferred that converts to common equity upon IPO.
- L3Harris will remain majority owner and plans a second-half 2026 IPO for Missile Solutions.
- Funding uses the Industrial Base Analysis and Sustainment fund as the first direct-to-supplier initiative.
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L3Harris Technologies said on Jan. 13, 2026, that a Department of War investment will support a spin-off of its Missile Solutions unit, aiming to boost solid rocket motor production and underpin an IPO planned for the second half of 2026.
Investment Terms and Production Scale-Up
The Department of War will invest $1 billion in Missile Solutions through a convertible preferred security that will convert into common equity upon the IPO, the company said in a press release. L3Harris will remain the majority owner after the public offering. The government’s stake will be a direct ownership position without board seats or management roles. The agreement is proposed and requires Congressional approval and appropriations to fund and close.
This structure links government financing to a near-term public listing, creating a distinct investor event and a dedicated capital path for expanding production capacity. The funding will come from the Department of War’s Industrial Base Analysis and Sustainment fund as part of the Acquisition Transformation Strategy. This marks the first direct-to-supplier initiative under that strategy, designed to support facility modernization and enable multi-year procurement frameworks.
Missile Solutions produces solid rocket motors used in missile programs including PAC-3, THAAD, Tomahawk, Standard Missile, and Patriot interceptors. The Department of War framed the investment as an effort to scale munitions production and introduce competition into the solid rocket motor supply base. It selected L3Harris for speed as a proven supplier alongside Northrop Grumman amid increased demand since the 2022 Ukraine invasion. The government-backed equity and direct-to-supplier procurement could accelerate capacity expansion for key missile programs and reshape longer-term supply-chain dynamics.
Management targets a second-half 2026 IPO for Missile Solutions. If the agreement and appropriations clear approvals, the Department of War’s preferred stake will convert to public equity, focusing investors, Capitol Hill, and the defense industrial base on the unit’s production ramp-up and procurement commitments.
