Mr. Mike Greenley reports

MDA SPACE ENTERS INTO FIRM OFFER TO ACQUIRE COLLECTE LOCALISATION SATELLITES ("CLS"), A GLOBAL LEADER IN AI-DRIVEN EARTH OBSERVATION DATA ANALYTICS

MDA Space Ltd. has entered into a firm and irrevocable offer to acquire a majority interest in CLS, a global leading provider of AI-driven (artificial intelligence) Earth observation value-added services and satellite IoT (Internet of Things) solutions. With more than 14,000 customers in approximately 150 countries, CLS is expected to generate approximately 286 million euros ($465-million (Canadian)) in revenue in 2026.

Pursuant to the transaction, at completion, MDA Space would acquire an approximately 70-per-cent interest in CLS from the shareholders of CLS's parent company, for approximately 567 million euros ($920-million (Canadian)) in cash (subject to adjustments). The Centre national d'etudes spatiales (CNES), the French space agency, would retain an approximately 30-per-cent interest in CLS.

Existing and next-generation MDA Space investments in Earth and space observation assets, ground stations, and associated data and analytics seamlessly complement core monitoring and forecasting applications pioneered by CLS.

"Our goal is for MDA Space to provide global government and commercial customers with the broadest and richest offering of multisensor Earth and space observation data, products and services on the market," said Mike Greenley, chief executive officer of MDA Space. "Bringing together MDA Space and CLS is a unique opportunity to create a growing, profitable, highly competitive and vertically integrated geospatial services business with industry-leading capabilities and go-to-market channels to address demand globally and accelerate growth for both businesses. Equally important, it preserves critical sovereign capabilities and capacity in France and Canada."

Founded in 1986 as a subsidiary of the CNES, CLS has continuously invested in innovative space-based solutions to monitor and protect the planet. With headquarters in Toulouse and 40 sites worldwide, CLS employs approximately 1,200 people dedicated to sustainable resource management.

"For more than 40 years, CLS has been harnessing space technologies, data and innovation to help better understand our planet and support its sustainable management. Joining forces with MDA Space represents a unique opportunity to accelerate our development, expand the global reach of our solutions and strengthen our innovation capabilities," said Stephanie Limouzin, chief executive officer of CLS. "We are confident that this new chapter will create value for our customers, employees and partners, while preserving what makes CLS unique: its mission-driven culture, deep expertise and long-standing commitment to delivering solutions that support a more sustainable and resilient world."

Following the closing of the acquisition of CLS and the previously announced acquisition of Blue Canyon Technologies, MDA Space expects to be within its target range of 1.5 times to 2.5 times net debt to adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) (1).

Transaction highlights

Next step in strategic scaling of MDA Space global footprint:

• Brings over 14,000 customers in approximately 150 countries with approximately 1,200 employees, establishing a significant presence in growing European and international export markets.

Establishes highly differentiated and vertically integrated geointelligence global leader:

• Seamlessly combines upstream satellite assets and services from MDA Space with downstream AI-driven (artificial intelligence) analytics, connectivity solutions, applications and proprietary algorithms from CLS.

Accelerates growth with global sales team, operations and channels to market:

• Expected to maximize MDA Chorus market penetration and sales with an additional 100-plus sales team.

Strengthens and diversifies MDA Space financial profile:

• Integrates growing, profitable, cash generating business. Details include:
  • Expected to be accretive to adjusted EBITDA and adjusted EPS (earnings per share) (1) within the first year of ownership;
  • Expected to double MDA Space recurring revenue stream;
  • CLS expected 2026 revenue of approximately 286 million euros ($465-million (Canadian)) translates to an average annual growth rate of 22 per cent since 2023;
  • CLS expected adjusted EBITDA margins are in line with MDA Space 2026 full-year outlook of 18 per cent to 20 per cent;
  • CLS expected to contribute positively to MDA Space free cash flow (1) after increasing MDA Space capital expenditures by approximately 10 per cent;
  • MDA Space will consolidate 100 per cent of CLS revenue and adjusted EBITDA with CNES's minority interest accounted for through non-controlling interest.

(1) Non-IFRS (international financial reporting standards) measures.

Transaction details

Upon completion of the transaction, MDA Space would acquire an approximately 70-per-cent interest in CLS and CNES would retain most of its existing holdings, which would equal an approximately 30-per-cent interest in CLS. In addition to the purchase price, in the event that CLS were unable to refinance its existing indebtedness at closing, the company would finance approximately 198 million euros to retire such existing indebtedness.

In accordance with applicable French law, the signing of the definitive securities purchase agreement in respect of the transaction remains subject to the information and consultation procedures of relevant employee representative bodies.

Subject to receiving all required regulatory approvals and completion of the above-mentioned mandatory information and consultation procedures, the transaction is expected to be completed by the end of 2026 or early 2027.

In connection with the transaction, MDA Space has received customary representations and warranties relating to the business and operations of CLS.

Norton Rose Fulbright LLP (Canada and France) acted as legal counsel to MDA Space, Freshfields LLP acted as legal adviser to CNP, Sekri Valentin Zerrouk acted as legal counsel to CLS's management and FTPA acted as legal counsel to CNES.

Moelis & Company acted as financial adviser to MDA Space, and Rothschild & Co. acted as financial adviser to the shareholders of CLS. MDA Space has obtained committed financing from BMO Capital Markets, RBC Capital Markets and Bank of Nova Scotia.

MDA Space management presentation

Interested parties can view a prerecorded webcast discussing the transaction. The prerecorded webcast along with an accompanying slide presentation updated with financial information will be available on the MDA Space investor relations website.

About MDA Space Ltd.

Building the space between proven and possible, MDA Space is a trusted mission partner to the global defence and space industry. A robotics, satellite systems and geointelligence pioneer with a 55-plus-year story of world firsts and more than 450 missions, MDA Space is a global leader in communications satellites, Earth and space observation, and space exploration and infrastructure. The global MDA Space team of more than 4,000 space experts has the knowledge and know-how to turn an audacious customer vision into an achievable mission -- bringing to bear a one-of-a-kind mix of experience, engineering excellence and wide-eyed wonder that have been in the company's DNA since day one. For those who dream big and push boundaries on the ground and in the stars to change the world for the better, MDA Space take you there.

About CLS

CLS is a global, mission-driven and pioneer provider of monitoring and surveillance solutions for the Earth, created in 1986. CLS is a subsidiary of the French Space Agency (CNES) and CNP, an investment firm. The CLS mission is to create innovative space-based solutions to understand and protect the planet, and to manage its resources sustainably. CLS employs approximately 1,200 people at its headquarters in Toulouse (France) and in 40 sites around the world. CLS works in five strategic markets: sustainable fisheries management; environmental monitoring; maritime surveillance; mobility; and energies and infrastructures. CLS processes data from almost 200,000 beacons per month (such as drifting buoys, animal tags, VMS beacons and LRIT tracking) and observes the oceans and inland waters (Every day, more than 20 instruments onboard satellites deliver information to CLS on the world's seas and oceans.). In addition, CLS monitors land and sea activities by satellite (Nearly 20,000 radar and optical images are processed each year.). The CLS Group had a revenue of nearly 223 million euros in 2025. Committed to a sustainable planet, every day, CLS works for the Earth, from space.

We seek Safe Harbor.