Richard Branson’s satellite launch company, Virgin Orbit, will debut on the Nasdaq through a merger with special purpose acquisition company NextGen Acquisition Corporation II.
“I am very pleased that we are bringing Virgin Orbit to the public, with the support of our partners at NextGen and our other wonderful investors,” Branson said in a statement. “This is another important step in enabling everyone working today to build space technology that will positively change the world.”
A SPAC is a shell company with no active business activity that is listed on the major stock exchanges where investors can buy shares. They use the funds raised by their sponsors and investors to acquire other companies.
The deal, which values Virgin Orbit at around $ 3.2 billion, will list the company’s shares under the ticker symbol VORB.
BRANSON’S VIRGIN ORBIT PLANS FOR THE LAUNCH OF NEW SATELLITES IN 2022
The transaction will provide the combined company with up to $ 483 million in cash proceeds, including up to $ 383 million in cash held in NextGen’s trust account and a fully committed PIPE led by Boeing and AE Industrial Partners offering $ 100 million to $ 10 per share.
The proceeds from the business combination and the PIPE transaction are expected to be used to expand rocket manufacturing and fund Virgin’s space solutions business and ongoing product development initiatives.
Existing shareholders of Virgin Orbit will invest 100% of their equity in the combined company. Assuming no buyouts by NextGen shareholders, existing Virgin Orbit shareholders are expected to retain ownership of approximately 85% of the combined company, while public NextGen shareholders are expected to own approximately 10% of the combined company and PIPE investors and sponsor SPAC are expected to hold approximately 3% and 2%, respectively, immediately after closing.
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The deal, which has been unanimously approved by the boards of directors of NextGen and Virgin Orbit, is expected to close by the end of the year, subject to the approval of NextGen shareholders and satisfaction. or waiver of customary closing conditions.
According to the Wall Street Journal, Branson’s Virgin Group owns around 80% of Virgin Orbit, while Mubadala Investment Company, the UAE’s sovereign wealth fund, owns the remainder.
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The announcement comes as the market for satellite launches is growing at “the highest rate ever,” according to Tyler Grinnell, vice president of flight and launch activities for Virgin Orbit.
After a successful launch on June 30 carrying a payload of seven satellites for the Defense Ministry’s space testing program, Polish company SatRevolution and the Royal Netherlands Air Force, Grinnell told FOX Business in July that Virgin Orbit is scheduled for another satellite launch in the fourth quarter of this year, followed by two busy years.
“Next year we’re looking to be just under double digits with launches and we’re looking to almost double the next year,” he said.
Virgin Orbit uses a technique called aerial launch, in which its 70-foot, 57,000-pound LauncherOne rocket is launched from an altitude of 35,000 feet under the wing of a 747-400 jet, dubbed the Cosmic Girl, rather than of a traditional launch. ground buffer.
After a 4 second free fall, LauncherOne’s first stage motor ignited, accelerating the rocket to over 8,000 miles per hour. From there, the second-stage engine cranks up, bringing LauncherOne to a top speed of 17,500 miles per hour.
In addition to improving the payload capacity of the rocket, the technique allows LauncherOne to fly on short notice and from a wide variety of locations to access any orbit. LauncherOne can carry satellite payloads weighing between 300 and 500 kilograms.
Virgin Orbit will work with UK based Arqit Limited, a leader in quantum encryption technology, to perform two low Earth orbit satellite launches starting in 2023. It will also work with defense and security firm QinetiQ and geospatial analysis firm HyperSat to launch six satellites in low earth orbit no earlier than 2023.