Virgin Orbit, a small launch vehicle developer, announced on August 23 that it was going public via a merger with the special-purpose acquisition company (SPAC) in a move that includes a Boeing investment. NextGen Acquisition Incorporated II, a SPAC with $383 million in the capital, will merge with Virgin Orbit. A $100 million private investment in public equity (PIPE) round will be held concurrently, with Boeing and AE Industrial Partners participating.
Depending on how many NextGen shares are redeemed by shareholders, the deal could provide Virgin Orbit with a maximum of $483 million in the capital. Recent SPAC transactions have experienced relatively high redemption rates, both within the space sector and in other industries, as owners effectively receive their money back instead of holding shares in the amalgamated business. The money will be used to scale up the production of Virgin Orbit’s LauncherOne rocket, as well as to fund the company’s “space solutions business” and new item development activities, according to the corporation.
Virgin Orbit would become a publicly traded firm on the Nasdaq, with an initial market capitalization of $1.35 billion. Existing Virgin Galactic stockholders will own 85 percent of the combined firm, followed by NextGen with 10% and PIPE investors as well as SPAC sponsors with the remaining 5%. The agreement is expected to finalize before the close of the year, according to the companies.
“Our launch success has propelled the business forward, and we hope that this investment will allow us to expand on our R&D activities and our fantastic team,” said Dan Hart, Virgin Orbit’s CEO, in a statement.
In a statement, Greg Summe and George Mattson, co-founders of NextGen, said, “The space economy is fast emerging, and Virgin Orbit is ideally positioned to capitalize through its capacity to competitively deploy at any moment, from any location on Earth, to just about any orbit and inclination.” “We are excited to apply our sector and financial expertise, as well as our leadership and management experience in public companies, to assist Virgin Orbit in delivering the next phase of its amazing adventure as a public firm.”
According to industry sources, Virgin Orbit had already been looking for a new round of finance since last year. The company’s first concentration was on a private round of investment, but when the alternative financial vehicle became more popular, it shifted its focus to SPACs. According to media sources from June, NextGen was considering a partnership with Virgin Orbit.
In a conference call with journalists shortly before the company’s most recent deployment in June, Hart refused to comment on the company’s funding attempts, including reports of NextGen’s interest. “Our investors have been fantastic, and they continue to be very, very supportive,” he said.