Abu Dhabi’s Mubadala Investment Company-backed small launch vehicle developer, Virgin Orbit will go public through a merger with a special-purpose acquisition company (SPAC) in a deal that values the satellite-launching startup at $3.2 billion.
Virgin Orbit will merge with NextGen Acquisition Corp. II, a SPAC that holds $383 million in the capital, which is expected to close by the end of 2021. Further, it includes a SPAC-related fundraising round known as private investment in public equity (PIPE) Virgin Orbit said. Boeing and AE Industrial Partners will be among the companies contributing to the $100 million PIPE.
The deal would give Virgin Orbit up to $483 million in the capital, depending on how many shares in NextGen are redeemed by shareholders. Some recent SPAC deals have seen relatively high redemption rates as shareholders effectively get their money back rather than hold shares in the merged company.
The investment will enable Virgin Orbit to expand its research and development efforts, according to Mr. Dan Hart, chief executive of Virgin Orbit. The funds will go toward scaling up the manufacturing of the startup’s LauncherOne rocket and to support the expansion of its “space solutions business” and new product development initiatives, the company said.
The merger would turn Virgin Orbit into a publicly traded company on the Nasdaq. Existing Virgin Galactic shareholders will own 85 percent of the merged company, with NextGen owning 10 percent and the PIPE investors and SPAC sponsors the remaining 5 percent.
The companies expect the deal to close by the end of the year. The merged company will keep the Virgin Orbit name and will begin trading on the Nasdaq under the ticker symbol “VORB”.
“The space economy is developing rapidly and Virgin Orbit is well-positioned to benefit through its ability to competitively launch at any time, from any place on Earth to any orbit and inclination,” said Mr. George Mattson and Mr. Greg Summe, co-founders of NextGen.
“Virgin Orbit is a game-changer for small satellite launch and space solutions industry and its listing is expected to be yet another milestone in its continuing success story,” said Mr. Abdulla Shadid, executive director of growth and M&A at Mubadala.
Established in 2017, Virgin Orbit, based in California, uses a modified Boeing 747-400 to launch rockets at about 35,000 feet above sea level. The company’s most recent successful launch, conducted on June 30, precisely delivered satellites for commercial and national security customers from the US and abroad directly into their target orbits.