Editor's note: An earlier version of this article incorrectly stated that York Space Systems did not disclose the acquisition price for All.Space, and argued that the lack of disclosure implied the deal was immaterial. In fact, York disclosed a $355 million acquisition price in an 8-K filing with the SEC. The article has been revised to reflect this information. We regret the error.

York Space Systems (YSS 8.19%), a Colorado-based space company, announced last week that it will acquire satellite communications terminal manufacturer All.Space, causing an immediate 13.4% spike in York's share price Thursday. In the few days since, York's managed to hold on to the majority of these gains. Shares slumped a bit on Friday, but by Monday the closing share price was back up nearly 10% from before the announcement.

But is York's deal to purchase All.Space really such an important development as to justify the price spike?

Image source: Getty Images.

How big of a deal is All.Space?

York didn't disclose the acquisition price for All.Space in its press release, but stated in an 8-K filing with the SEC that it intends to pay $355 million total. $155 million will be paid in cash, plus 5.9 million shares of York stock. That's a high price, but what will York get for its money?

That's hard to say, because York didn't disclose information on All.Space's revenue or profits. S&P Global Market Intelligence data suggests All.Space probably does less than $17 million in revenue, though. If that number is accurate, it's barely 4% of York's own revenue.

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NYSE: YSS

York Space Systems

Today's Change

(-8.19%) $-2.15

Current Price

$24.11

Key Data Points

Market Cap

$3.2B

Day's Range

$24.00 - $27.29

52wk Range

$16.93 - $44.54

Volume

1.4M

Avg Vol

2.4M

What we know about All.Space

We also know a bit about why York wants to own All.Space. York CEO Dirk Wallinger explained that York wants to create "a complete communications ecosystem that operates in contested environments across commercial and government networks." All.Space apparently possesses technology that serves as a link in the chain York wants to forge -- a high-performance, software-defined terminal called "Hydra" that can communicate with satellites in low earth, middle earth, geosynchronous, and highly elliptical orbits, and that may be resistant to jamming.

It makes sense that York would want to own this technology, and not just buy All.Space's terminals at retail. To date, York has won at least 136 Space Force contracts to build "transport layer" satellites for the U.S. Space Force's Proliferated Warfighter Space Architecture (PWSA) missile defense program.

("Transport" here refers to York's satellites communicating with one another and also communicating with ground stations.)

Having strong communication technology is essential to York's mission. It therefore makes sense that York would want to lock that down by buying All.Space. Still, lacking detail on how much revenue All.Space makes, and how much profit it earns, makes it difficult to say whether this is a good or a bad deal for York from a financial perspective.

So what does this mean for York investors today? The company is probably in a better business position with All.Space than without it. But as an investment, York appears to be spending 21 times sales to acquire All.Space, which may or may not be profitable, while York itself remains unprofitable, burning cash, and with a stock costing more than 10 times trailing sales

Buying All.Space won't change any of that.