L3Harris Technologies (NYSE:LHX) announced the closure of a $1 billion strategic investment from the Department of Defense (DoD) into its newly formed Missile Solutions (MSL) business.
The capital injection is designated to modernize facilities, accelerate high-priority research and development, and scale production capacity for critical national security programs, including the PAC-3, THAAD, Tomahawk, and Standard Missile systems.
The investment is structured as a convertible preferred security of the MSL unit, which will convert into common equity upon the completion of an initial public offering (IPO).
Additionally, the DoD received warrants to purchase common stock in MSL.
This move underscores the federal government's commitment to strengthening the domestic defense industrial base through public-private partnerships.
L3Harris established MSL in early 2026 by consolidating its missile-related capabilities, most notably the propulsion and energetics operations acquired through the legacy Aerojet Rocketdyne transaction.
The restructuring was designed to create a pure-play missile technology leader capable of meeting the surging global demand for precision-guided munitions and hypersonic defense.
The company reaffirmed its intention to pursue an IPO of the Missile Solutions business in the second half of 2026, contingent on market conditions.
Proceeds from the eventual public offering are expected to further de-lever L3Harris's balance sheet while providing MSL with an independent capital structure to pursue aggressive growth.