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(Clarifies to say EBITDA in paragraph 16)
By John Revill
BERN, June 5 (Reuters) - Swiss defence and aerospace company RUAG is planning around a $500 million acquisition spree to cash in on a boom in private U.S. space projects inspired by billionaire Elon Musk's SpaceX.
RUAG, owned by the Swiss state, makes ammunition for the Swiss army as well as parts for satellites and airliners. But Chief Executive Urs Breitmeier told Reuters the firm wants to get out of defence and concentrate on expanding its space business before a planned flotation in the next couple of years,
Switzerland said in March it wanted to privatise RUAG, which has become a technology specialist in civil aviation and space since it was created 21 years ago. Defence now makes up less than half its 2 billion Swiss francs in sales.
Breitmeier wants the company to capitalise on the space industry's shift towards the private sector.
"There has been a big change in the space industry in recent years," Chief Executive Urs Breitmeier said in an interview. "It has moved from institutions to the commercial sector.
"The U.S. market is much more dynamic than the European market with billionaires like Elon Musk, Jeff Bezos and Richard Branson setting up space companies. If you want them as your customers, you have to be there."
Musk's SpaceX has upended the launch services market by slashing the cost of rocket launches with its reusable rocket technology.
The California company is one of several private groups challenging legacy aerospace companies in a new "space race" fueled by demand for satellite launch services and, potentially, tourism and deep space exploration.
Some of the newer space companies also have their sights set on Internet services, asteroid mining, lunar missions, and in-space manufacturing, among other endeavors.
Morgan Stanley has estimated the global space industry could generate revenues of $1.1 trillion or more in 2040, up from $350 billion currently.
ACQUISITION TRAIL
Breitmeier said RUAG must scale-up in space and aerospace for a successful IPO and aims to spend "at least half a billion francs" on acquisitions in that area to prepare for the flotation in Switzerland in 2021 or 2022.
The group plans to raise the money by selling off its bullet making division Ammotec, its cybersecurity arm and the maintenance and repair business that works for armed forces outside Switzerland.
Breitmeier said private equity and industrial buyers are already showing interest and the first deals could come this year.