The Phoenix of Propulsion: Rocketdyne Returns to Power America's Future

By Tyler Nguyen

BOCA RATON, FL – January 05, 2026 – A legendary name in American spaceflight, responsible for powering missions from the Moon landing to the Space Shuttle, is being reborn. Private investment firm AE Industrial Partners (AEI) announced today it has acquired a controlling interest in the Space Propulsion and Power Systems business of defense giant L3Harris Technologies for $845 million. In a move steeped in historical significance, AE Industrial plans to restore and operate the business under its original, iconic name: Rocketdyne.

The transaction carves out a critical piece of the nation's space industrial base, encompassing the teams and facilities that have developed stalwart upper-stage engines for over 60 years. L3Harris, which acquired the business as part of its $4.7 billion purchase of Aerojet Rocketdyne in July 2023, will retain an approximately 40% minority stake and continue as a strategic partner. This deal signals a new chapter for a storied enterprise, blending private equity's agility with a renewed focus on both modernizing proven technology and pioneering the next generation of deep space propulsion.

A Legend Reborn

The decision to resurrect the Rocketdyne name is a deliberate nod to a powerful legacy. Founded in 1955, Rocketdyne was the engine that lifted America's space ambitions. Its engineers developed the colossal F-1 engines that powered the Saturn V rocket's first stage, making the Apollo Moon missions possible. The company also created the highly efficient J-2 engines for the Saturn V's upper stages and the reusable RS-25 main engines for the Space Shuttle fleet, which completed 135 missions.

“Rocketdyne is more than just a company, it is the birthplace of U.S. rocket propulsion," said Kirk Konert, Managing Partner at AE Industrial, in a statement. The name itself evokes an era of audacious engineering and national purpose. However, decades of industry consolidation saw the brand absorbed into a succession of corporate giants—from Rockwell International to Boeing, then Pratt & Whitney, and finally Aerojet Rocketdyne before its acquisition by L3Harris. Each transition further distanced the business from its pioneering identity.

AE Industrial's acquisition aims to reverse this trend, creating a focused, independent entity dedicated solely to space propulsion and power. The deal includes the venerable RL10 engine, a cryogenic upper-stage workhorse with over 700 successful missions since its 1963 debut, as well as assets related to in-space propulsion and advanced nuclear power systems.

Private Equity's New Frontier

This acquisition is more than just an exercise in branding; it represents a strategic bet on a new operational model for critical defense and space assets. AE Industrial is positioning the venture as a "new hybrid model of agile collaboration, combining the stability and power of a national defense prime with the innovation of a specialized investor."

AEI has a proven playbook for this strategy. The firm's portfolio includes notable successes in the space sector. It was a key investor in Firefly Aerospace, which achieved the first-ever commercial soft landing on the Moon with its Blue Ghost lander in March 2025. AEI also formed Redwire Space in 2020 by consolidating several smaller space infrastructure companies, quickly taking it public and establishing it as a leader in on-orbit manufacturing and solar power generation.

For L3Harris, the divestment aligns with a broader strategy of portfolio optimization. The sale allows the defense prime to streamline operations and concentrate on its core mission priorities for the Department of Defense, while still benefiting from the new Rocketdyne's potential growth through its retained minority stake. Notably, L3Harris is keeping the RS-25 engine business, which powers NASA's new Space Launch System (SLS), indicating a strategic division of its propulsion assets.

Modernizing a Workhorse, Reaching for Mars

The immediate task for the new Rocketdyne will be to revitalize its flagship product. Konert highlighted the firm's intent to take the “historic engine – the RL10 – and applying modern manufacturing discipline... to revolutionize the production line.” This focus on efficiency, cost reduction, and increased production rates is critical in a launch market defined by intense competition and demand for reliability.

Beyond modernizing legacy systems, the partnership is setting its sights on the next great leap in space travel: nuclear propulsion. The press release explicitly states an ambition to accelerate the development of technologies like nuclear thermal propulsion (NTP), which is seen as essential for crewed missions to Mars and robust operations in the cislunar domain.

NTP systems, which use a fission reactor to superheat a propellant for thrust, promise to be twice as efficient as the best chemical rockets, potentially cutting the transit time to Mars from nine months to as little as 45 days. This isn't a distant fantasy; NASA and DARPA are already collaborating on the DRACO program, which aims to demonstrate an NTP system in orbit by 2027. The renewed focus from a commercial entity like Rocketdyne, backed by a dedicated investment firm, could provide a significant boost to these efforts.

Navigating a Crowded and Nuclear Future

The reborn Rocketdyne enters a dynamic and challenging market. It will compete not only with the remaining propulsion segments within L3Harris but also with vertically integrated giants like SpaceX and Blue Origin, which build their own engines. The pressure to innovate on both cost and capability has never been higher.

Furthermore, the path to nuclear propulsion is fraught with obstacles. While the technology holds immense promise, the regulatory framework for launching and operating nuclear systems in space remains a significant hurdle. Companies face a complex, multi-agency review process involving the FAA, Department of Energy, and NASA, among others. Issues surrounding launch licensing, environmental reviews, and liability protection have historically slowed progress and stifled commercial investment.

Recent policy moves, such as National Security Presidential Memorandum 20, have begun to streamline the process, and venture capital investment in space nuclear startups is growing. However, turning ambitious goals into operational hardware will require sustained capital and a concerted effort to navigate the policy landscape. The new Rocketdyne, with its unique blend of storied heritage, focused investment, and strategic partnerships, is now positioned to play a pivotal role in confronting these challenges and defining the future of American leadership in space.