Orbimage Holdings Inc. agreed to acquire the assets of Space Imaging LLC, Orbimage announced Sept. 16.

Dulles, Va.-based Orbimage, which operates the Orbview 3 high-resolution imagery satellite, will pay about $58.5 million for its rival satellite imagery company, less amounts paid by Space Imaging on its existing debt prior to the closing of the deal. The transaction, which is subject to government approval, is expected to close before the end of the year.

Space Imaging was put up for sale by owners Lockheed Martin and Raytheon after the satellite imagery company failed to win a contract from the U.S. National Geospatial-Intelligence Agency (NGA) that would have helped fund the development of a next-generation imagery spacecraft. Orbimage and Digitalglobe won the $500 million Nextview contracts. Space Imaging’s existing Ikonos satellite is expected to operate until mid-2008.

“Space Imaging’s network of domestic and international customers and its terrific employees made this transaction very attractive,” Matthew O’Connell, Orbimage president and CEO, said in a statement. “The combination will allow us to provide more cost effective, complementary and robust solutions to customers of both companies.”