Mubadala-backed Virgin Orbit to go public through $3.2bn Spac deal

Boeing will be one of the investors in the space start-up's planned listing on Nasdaq

The Virgin Orbit "Cosmic Girl" - a modified Boeing Co. 747-400 carrying a LauncherOne rocket under it's wing - is prepared on the tarmac for the Launch Demo 2 mission from Mojave Air and Space Port on January 17, 2021 in Mojave, California. - The LauncherOne rocket, which will release from the wing of the Boeing 747 before ignition, contains small research satellites, known as CubeSats for NASA's Educational Launch of Nanosatellites (ELaNa) 20 mission developed by nine research universities and a NASA center. (Photo by Patrick T. FALLON / AFP)
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Virgin Orbit, which is backed by Abu Dhabi's Mubadala Investment Company, plans to list on the Nasdaq stock exchange through a merger with a special purpose acquisition company in a deal that values the satellite-launching start-up at $3.2 billion.

The merger with NextGen Acquisition Corp II – which is expected to close by the end of 2021 – also includes a Spac-related fundraising round known as a private investment in public equity, or Pipe, Virgin Orbit said on Monday. Boeing and AE Industrial Partners will be among the companies contributing to the $100 million Pipe.

The investment will enable Virgin Orbit to expand its research and development efforts, according to Dan Hart, chief executive of Virgin Orbit. "We’ve built Virgin Orbit to change the business of satellite launch and to open space for everyone, globally," he said.

The deal is part of a wave of Spac mergers this year. Blank-cheque companies, also known as Spacs, are those with no commercial operations and trade without business fundamentals. They are formed with the intention of raising funds through an initial public offering and seek to acquire existing companies.

Although Spacs have been around for a long time, they have become popular in recent years, attracting high-profile investors and raising more than $83 billion last year alone, according to Bloomberg data.

"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 George Mattson and Greg Summe, co-founders of NextGen.

Once closed, the transaction is expected to provide the combined company up to $483m in cash proceeds, including up to $383m of cash held in the trust account of NextGen and a $100m fully committed Pipe.

The merged company will keep the Virgin Orbit name and will begin trading on the Nasdaq under the ticker symbol “VORB”.

The transaction is expected to close around the end of the year, subject to, among other things, approval by NextGen’s shareholders and the completion or waiver of other customary closing conditions, the company said.

“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 Abdulla Shadid, executive director of growth and M&A at Mubadala. Mubadala’s investment in Virgin Orbit complements the broad objectives of the UAE’s national space strategy, he added.

Proceeds from the merger and Pipe are expected to provide growth capital to further scale rocket manufacturing to meet customer demand and to fund growth in Virgin Orbit's space business and its ongoing product development initiatives, the company said.

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. In January, the company successfully launched satellites for Nasa.

Updated: August 23, 2021, 2:56 PM