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Virgin Orbit to go public through $3.2bn SPAC merger

The merger will turn Virgin Orbit into a publicly traded company on the Nasdaq with an initial valuation of $3.2bn.

Small launch vehicle developer Virgin Orbit, through its parent company Vieco USA, Inc. and NextGen Acquisition Corp. II, a special purpose acquisition company, has entered into a definitive merger agreement under which Virgin Orbit will become a publicly traded company.

Upon closing, 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 (assuming no redemptions) and a $100m fully committed PIPE; the combined company will retain the Virgin Orbit name and is expected to be listed on Nasdaq under the ticker symbol ‘VORB’.

The merger will turn Virgin Orbit into a publicly traded company on the Nasdaq with an initial valuation of $3.2bn. Existing Virgin Galactic shareholders will own 85% of the merged company, with NextGen owning 10% and the PIPE investors and SPAC sponsors the remaining 5%. The companies expect the deal to close by the end of the year.

The boards of directors of both Virgin Orbit and NextGen have unanimously approved the proposed business combination, which is expected to be around the end of the year subject to, among other things, the approval by NextGen’s shareholders and the satisfaction or waiver of other customary closing conditions.

Speaking about the SPAC merger, Sir Richard Branson, Founder of Virgin Orbit, said: “The Virgin Orbit team has proven its ability to create new ideas, new approaches, and new capabilities. They are building on the incredible foundation of their rapid transition into successful commercial launch operations to find new ways to solve big problems that uplift our customers’ amazing ideas, again and again. I’m very excited we are taking Virgin Orbit public, with the support of our partners at NextGen and our other wonderful investors. It’s another milestone for empowering all of those working today to build space technology that will positively change the world.”

Dan Hart, CEO of Virgin Orbit, added: “We’ve built Virgin Orbit in order to change the business of satellite launch and to open space for everyone, globally. Whether it’s engaging with world leaders at the G7 Summit or seeing the smiles on the faces of our international community of customers after our most recent launch, our mission gets more exciting with every step we take. Our success in launch has driven the business forward, and now we expect this investment will enable us to build on our R&D efforts and our incredible team. We are driving innovation with world-class design and advanced manufacturing capabilities, our unrivalled mobility of launch, and our exciting space solutions services.”

George Mattson and Greg Summe, Co-Founders of NextGen, stated: “We are delighted that our search for a great company, with strong organic growth in a large and growing market, disruptive technology and a world-class management team has led to our partnership with Virgin Orbit. 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. This is a truly unique and differentiating capability. We have worked with Sir Richard and the Virgin Group on various projects, including Virgin Galactic, over the last few years and admire their vision and commitment as they have built Virgin Orbit from an idea to a commercial reality. We look forward to leveraging our industry and financial experience, along with our public company leadership and governance experience to help Virgin Orbit deliver the next chapter of its exciting journey as a public company.”

Abdulla Shadid, Executive Director, Growth & M&A at Mubadala, noted: “Virgin Orbit is a game-changer for the small satellite launch and space solutions industry and its listing is expected to be yet another milestone in its continuing success story. Our investment in Virgin Orbit since its inception is a reflection of our confidence in the company’s ability to carve out a leading role in this sector. It also complements the broad objectives of the UAE’s national space strategy, as reflected in the recent successful “Hope” satellite mission to Mars.”

Virgin Orbit operates the air-launch LauncherOne system, which features a two-stage rocket launched from a Boeing 747 aircraft. The company has carried out three launch attempts to date. After a failure on the first launch in May 2020, the company reached orbit in January carrying a set of cubesats for NASA. It launched its latest mission on June 30, placing seven cubesats into orbit for the Defense Department, Royal Netherlands Air Force and Polish smallsat developer SatRevolution.