Virgin Orbit Announces Space SPAC Deal

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Space is the next frontier for SPACs, with Sir Richard Branson’s Virgin Orbit announcing a deal on Monday in which Boeing will be an investor.

The satellite-launching startup said its merger with NextGen Acquisition will raise up to $483 million in new capital, including $100 million private investment in public equity, or PIPE, financing led by Boeing and space business investor AE Industrial Partners.

Proceeds from the deal, which values Virgin Orbit at about $3.2 billion, will go toward expanding its services and accelerating launches, with six expected next year.

“I’m very excited we are taking Virgin Orbit public, with the support of our partners at NextGen and our other wonderful investors,” Branson said in a news release. “It’s another milestone for empowering all of those working today to build space technology that will positively change the world.”

Branson’s Virgin Group currently owns 80% of Virgin Orbit, with Mubadala Investment, the United Arab Emirates sovereign-wealth fund, owning the rest.

As The Wall Street Journal reports, “Virgin Orbit’s planned listing comes as investors increasingly bet on the falling costs of accessing space for business, tourism, and scientific research.” Morgan Stanley forecasts the space sector will expand from $350 billion a year in 2016 to more than $1 trillion by 2040.

Virgin Orbit, which was spun off from the Virgin Galactic tourism company in 2017, is one of several startups building miniaturized launch systems to capitalize on the expected boom in demand for compact satellites. It operates the LauncherOne system, which features a two-stage rocket launched from a Boeing 747 aircraft.

“Virgin Orbit has completed two successful satellite launches this year, lifting the company into a small group of small-satellite launch providers able to offer flight-proven hardware,” the Journal reported.

NextGen Acquisition is run by former Goldman Sachs banker George Mattson and Greg Summe, a former senior executive at the Carlyle Group.

“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,” Mattson and Summe said.