Small satellites go big with Virgin Orbit listing

Bengaluru — Billionaire Richard Branson’s Virgin Orbit is going public through a merger with a blank-cheque vehicle in a deal that values it at $3.2bn and includes an investment from Boeing, it said on Monday.

The small satellite launch service provider’s deal with NextGen Acquisition II includes a private investment in public equity (Pipe) of $100m. Boeing and AE Industrial Partners participated in the Pipe round, besides other investors.

Shares of NextGen were up 2.4% in premarket trading.

Firefly, US-New Zealand start-up Rocket Lab, and Branson’s Virgin Orbit are seen as frontrunners in a new breed of firms building miniaturised launch systems to cash in on the exponential growth of compact satellites, expected in the coming years.

These firms offer a unique “air-launch” method of sending satellites to orbit with small-launch systems.

Blank-cheque companies, also known as special purpose acquisition companies (Spacs), use capital they raise through an initial public offering to merge with a private firm and take it public.

Virgin Orbit, which was spun off from Branson’s space tourism company Virgin Galactic Holdings in 2017, reached space for the first time in January when it delivered 10 Nasa satellites to orbit, after a failed attempt in 2020.

The company is led by aviation veteran Dan Hart, a former executive at Boeing. Virgin Orbit’s government services unit VOX Space is selling launches to the US military. The company won a $35m US Space Force contract for three missions in 2020.

The deal with NextGen Acquisition is expected to provide $483m in proceeds for the combined company. Virgin Orbit will list on the Nasdaq, post the closing of the merger, under the ticker symbol “VORB”.

Reuters