Karman Space & Defense Expands Capabilities with Acquisition of ISP, a Leading Energetic Propulsion Technology Provider
Karman Space & Defense (“Karman,” “Karman Holdings, Inc.” or “the Company”) (NYSE: KRMN), a prominent innovator in the rapid design, development, and production of advanced system solutions for launch vehicles, satellites, spacecraft, missile defense, hypersonics, and unmanned aerial systems (UAS), announced today the successful acquisition of Industrial Solid Propulsion (“ISP”), a renowned supplier of specialty energetic propulsion technologies. This strategic acquisition, completed on May 28, 2025, marks a significant milestone in Karman’s commitment to expanding its technological capabilities and market presence in the dynamic sectors of UAS, UAS intercept systems, and rocket-assisted takeoff (RATO) technologies.
Founded in 1983 and headquartered in Cedar City, Utah, ISP brings over 40 years of expertise and a rich legacy of innovation in energetic propulsion technologies. The company specializes in designing and manufacturing small-diameter solid boost motors and solid propellant gas generators, delivering critical performance parameters such as distance, total impulse, peak thrust, and controlled burn times tailored to meet stringent mission demands. ISP’s deep-rooted expertise, coupled with its proprietary portfolio of propellant formulations and tactical motor configurations, has earned it a distinguished reputation among prime U.S. Department of Defense (DOD) programs, underscoring its proven flight heritage and operational reliability.
Strategic Fit and Synergy
Tony Koblinski, CEO of Karman Space & Defense, emphasized the strategic value of the acquisition:
“We have been collaborating with ISP for several months on a variety of promising opportunities and have come to recognize that ISP is a natural and strategic fit within the Karman family. This acquisition enhances our core competencies in energetics and broadens our offerings in small-diameter solid propellant technologies. Most importantly, it allows us to better serve our existing and future customers with integrated, cutting-edge propulsion solutions tailored for next-generation aerospace and defense applications.”
Koblinski further elaborated on how ISP’s unique capabilities align with Karman’s mission:
“ISP’s proprietary propellant formulations and specialized manufacturing capabilities perfectly complement Karman’s commitment to leveraging advanced technologies. Together, we can accelerate the delivery of agile, innovative solutions that address the rapidly evolving needs of the space and defense markets. We are excited to welcome ISP’s highly skilled team and look forward to working together to create even greater value for our customers.”
ISP’s Capabilities and Market Position
ISP’s technological expertise centers around the full lifecycle of energetic propulsion systems — from concept and design through testing, qualification, and production. The company’s vertically integrated approach includes propellant chemistry and cartridge design, grain formulation, mixing, precision machining, cartridge loading, and rigorous hot-fire testing. This comprehensive suite of in-house capabilities enables ISP to rapidly develop and qualify propulsion systems optimized for high performance, reliability, and mission-specific requirements.
In particular, ISP’s small-diameter energetic systems and cartridges are tailored to meet critical needs in emerging markets such as one-way loitering munitions, counter-UAS intercept systems, and RATO applications. These technologies are vital components in modern aerospace and defense strategies, supporting rapid deployment, increased operational flexibility, and enhanced mission effectiveness.
ISP’s ongoing involvement in high-profile DOD programs demonstrates its strong alignment with government priorities and future funding trends. The company’s propulsion solutions are recognized for their tactical advantages, including compact size, precise performance parameters, and rapid response capabilities—features that are increasingly demanded by military and defense agencies globally.
Commitment to Workforce Development and STEM Education
Beyond its technological prowess, ISP has cultivated a longstanding commitment to supporting STEM (Science, Technology, Engineering, and Mathematics) education through active engagement with schools, camps, clubs, and youth organizations. ISP’s educational initiatives focus on empowering the next generation of propulsion and energetics engineers by providing tools, training, and hands-on opportunities to experiment and innovate. This dedication to workforce development aligns closely with Karman’s philosophy of fostering local talent pipelines and promoting community involvement.
Tony Koblinski noted,
“ISP’s passion for nurturing young talent through STEM education resonates deeply with Karman’s core values. By supporting educational programs and encouraging youth engagement in energetics and propulsion technologies, we are investing not only in the future of our industry but also in the communities where we operate. This acquisition strengthens our ability to identify, attract, and develop top-tier engineers who will drive innovation for decades to come.”
Transaction Details and Financial Structure
The acquisition of ISP was facilitated by Karman’s recent successful financing initiative. On May 27, 2025, Karman closed an offering to increase its existing $300 million Term Loan B by $75 million. The majority of the proceeds from this financing were allocated to fund the ISP acquisition, which was structured with a combination of cash and equity, alongside potential earnout payments to align incentives.
Specifically, the transaction consisted of $50 million in cash, approximately $5 million in newly issued Karman common shares, and up to $5 million in contingent earnout payments tied to future performance milestones. This balanced financial structure reflects Karman’s strategic commitment to preserving liquidity while investing in growth opportunities that drive long-term shareholder value.
Advisors Supporting the Transaction
Karman engaged Citi as its exclusive financial advisor and retained Willkie Farr & Gallagher LLP as its legal counsel to navigate the complexities of the acquisition. On the other side, ISP was advised by KAL Capital, who provided financial guidance to ensure a smooth and mutually beneficial transaction process.
Integration and Growth Opportunities
With ISP now officially part of the Karman family, the focus will shift toward integrating ISP’s technologies, personnel, and operational capabilities to maximize synergy and accelerate growth. This includes leveraging Karman’s established relationships across the aerospace and defense sectors to expand market reach, enhance product development pipelines, and pursue new business opportunities.
Karman and ISP’s combined expertise will enable the delivery of highly optimized propulsion solutions designed to meet increasingly complex mission profiles. This is especially important as defense agencies and commercial space customers demand innovative technologies to address evolving challenges, including rapid response UAS deployment, enhanced intercept capabilities, and improved launch performance through rocket-assisted takeoff systems.
About Karman Space & Defense
Karman Space & Defense is a publicly traded company (NYSE: KRMN) specializing in the rapid design, development, and production of critical systems for a broad range of aerospace and defense applications. The company serves customers involved in launch vehicles, satellites, spacecraft, missile defense, hypersonics, and unmanned aerial systems. Karman is known for its agile engineering approach, cutting-edge technology portfolio, and commitment to meeting the urgent and evolving needs of government and commercial clients worldwide.
About ISP
Industrial Solid Propulsion (ISP), established in 1983 and based in Cedar City, Utah, is a leader in specialty energetic propulsion systems, including small boost motors and solid propellant gas generators. ISP’s proprietary propellant formulations and tactical motor configurations have proven flight heritage on numerous Department of Defense programs. The company offers integrated propulsion design, manufacturing, and testing capabilities that enable rapid concept-to-production timelines and mission-specific performance optimization. ISP is also dedicated to STEM education and workforce development, fostering the next generation of propulsion engineers.
This acquisition underscores Karman Space & Defense’s ongoing strategy to expand its technological leadership and market footprint in energetic propulsion systems, ensuring its ability to deliver next-generation solutions that meet the evolving demands of the aerospace and defense sectors.
