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Friday, Sep 22, 2023

Virgin Orbit to Go Public via SPAC

Long Beach-based aerospace company Virgin Orbit plans to go public in a merger with Boca Raton, Fla.-based NextGen Acquisition Corp. II, a special purpose acquisition company.

The deal is valued at $3.2 billion.

The company will be named Virgin Orbit Holdings Inc. and will list on Nasdaq under the ticker symbol VORB.

Virgin Orbit said in an Aug. 23 investor presentation that it plans to use the proceeds from the merger to expand its launch business and create its own satellite constellation. Around 40% of the funds made from the deal will go toward ramping up production of its in-air launch vehicle, LauncherOne.

The company anticipates its total 2021 revenue will be $15 million with the majority of revenue coming from launch services. By 2026, its estimates it will reach more than $2 billion in annual revenue.

Aerospace industry publication Sky News reported in mid-June that Virgin Orbit was considering going public. Reports said Virgin Orbit had been considering a SPAC deal with several prospective partners months prior to that.

“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,” George Mattson and Greg Summe, the co-founders of NextGen, said in a statement.

The combined company is expected to make $483 million from the transaction, which includes around $383 million in cash from a trust account held by NextGen and $100 million from private investment in public equity, or PIPE. The deal is expected to close in the fourth quarter.

NextGen II completed its own initial public offering in March, bringing in $350 million. It made an additional $33 million through an over-allotment in April.

The company’s major shareholders include London-based Virgin Group, Abu Dhabi-based Mubadala Investment Co. and the company’s management and employees.

Virgin Orbit’s current shareholders will roll all their equity into the combined company. Once the deal is closed, the company’s current shareholders will own 85% of the company, and NextGen’s public shareholders will own around 10%.

PIPE investors will hold around 3% of the company, and the merger’s sponsor, called NextGen Sponsor II, will walk away with around 2%.

“The Virgin Orbit team has proven its ability to create new ideas, new approaches, and new capabilities,” Virgin Orbit founder Richard Branson said in a statement.

Virgin Orbit launches small satellites into low Earth orbit for its customers. The company spun off from Mojave-based Virgin Galactic, Branson’s space tourism company, in 2017.

Virgin Orbit conducted its first successful launch of a rocket in January and has conducted two other launches since. 

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